Employees look to their leaders for guidance.
In the past, this guidance was limited to topics like company culture and strategy. But today, more than ever, it’s important for leaders to help their employees understand the importance of financial literacy.
This isn’t solely an altruistic endeavor: it’s in everyone’s interest to have financially savvy employees.
In this article, we’ll look at why leaders need to teach financial literacy and provide some tips on how they can do so effectively.
Ready? Let’s dive in!
A Rising Tide Lifts All Boats: How Financial Literacy Benefits Everyone
Financial literacy has a huge impact on employees’ lives: from helping them build emergency funds, to making wise investments and managing monthly bills, to saving for retirement.
And financially literate employees can make better, more informed decisions in their personal lives and help the company save money through sensible spending habits.
It’s a win-win situation—and it all starts with leaders teaching financial literacy.
Some leaders might think that their team, is made up of adults, should be able to manage their own money. But you can be a smart, capable employee and still lack financial literacy—and that’s where leaders come in.
We understand not wanting to offend anyone by assuming they need help with their finances. But by teaching financial literacy, leaders can create a culture of learning and support—one where everyone feels comfortable talking about money.
When leaders teach financial literacy, they’re able to help their employees navigate the dizzying world of money management. From avoiding scams like buy now pay later schemes, to learning about NSF (nonsufficient funds fee) charges, to understanding the differences between taxable and tax-exempt investments, financial literacy can help employees be more efficient—for themselves as well as your company.
Tips for Teaching Financial Literacy
Now that you know the importance of teaching financial literacy, you’ll have to put it into practice.
Of course, not all leaders will be comfortable taking on the role of a financial advisor and teaching employees about their finances. But don’t worry—here are some tips to help you out.
Set the tone
Remember that your employees look to you for guidance. By setting a positive example, you can encourage your team to explore their financial literacy and develop better money habits.
That means leading by example and talking openly about your own financial decisions. Showing your team that you’re financially savvy can be an inspiration for them to do the same.
Be careful how you speak
On a similar note, the tone with which you discuss money matters is important. Avoid talking about money in a judgmental or condescending way.
Remember: you’re speaking to adults here.
Don’t patronize anyone by assuming they know less than you do. Treat your employees as they most likely are: competent, capable individuals who just need a bit of guidance.
And since money can be a touchy subject, try to keep discussions serious. A flippant comment about ditching avocado toast to put a downpayment on a home can come off as insensitive, if not downright offensive.
Provide resources
Leaders should also make sure that their teams have access to helpful resources. This could include books, podcasts, articles, or webinars on money management—all of which can help employees become more financially literate.
In addition, leaders should make sure their team has access to a financial advisor or another professional who can provide further guidance and answer any questions they might have.
Encourage openness
Leaders should create a safe, judgment-free environment in which employees feel comfortable talking openly about their financial problems and successes.
This can help foster a sense of camaraderie, making it easier for everyone to learn and grow together.
As we noted earlier, money remains to be a sensitive subject for most of us. Admitting that we don’t know something about money, or that we’re struggling with a particular financial issue can sometimes feel like admitting to a crime.
These beliefs are counter to financial literacy, so leaders should do everything they can to fight them.
Use real-world examples
There’s nothing like real-world examples to nail home a point.
Leaders should look for relevant, timely stories to show employees how their money decisions can have real-world implications and encourage them to think about the bigger picture.
For instance, knowing that one of your employees will be having a baby soon could be the perfect time to discuss investing in a college fund. Or if you hear about an unexpected fee being assessed by a bank, you can use it as an opportunity to talk about the many different fees associated with accounts.
Tailoring your examples to each individual makes the lesson all the more memorable. Engage them with stories and anecdotes that hit close to home—your efforts won’t be wasted.
By doing all this, leaders can create a culture of financial literacy in their teams and equip them with the tools they need to make smarter money decisions. By teaching financial literacy, you’re not just helping your employees—you’re also helping your business grow. So get out there and start teaching!