Family-centered benefits play a major role in the lives of an employee’s children. Health insurance, paid maternity/paternity leave, and FMLA all receive – and deserve – a great deal of limelight, but there is one area that also stands to make a highly significant and lifelong contribution, and that is financial education.
In today’s competitive job market, candidates are focused on perks beyond just title and salary. Employers who offer creative benefits are doing so in an effort to retain top talent, as family benefits are becoming a way for employees to ascertain whether a company supports and values the family dynamic.
Along with the more common family-related benefits that are offered, financial education for children could make the greatest impact of all.
Consider this: Financial literacy education is neither taught in school nor required in the majority of our states. Often, parents are reluctant to discuss money matters with their children and tend to avoid financial topics. As a result, young adults entering college may not always have a realistic concept of how to manage their finances, which is a dangerous place to be.
Children learn financial behaviors early
Studies show that children develop most of their attitudes towards money by the age of seven. What they learn at that time will shape how they approach finances in adulthood and beyond. Their attitudes towards money will go on to impact their own children, grandchildren, and further generations beyond. This alone should illustrate how important it is for parents to discuss money management with their children.
The employer’s role in family financial literacy
Employers are well-positioned to offer financial literacy education to employees and their families. This could even be viewed as an extension of retirement planning, an activity that many employers already participate in.
As family-related financial learning becomes more popular as a job benefit, employees are empowered to raise financially aware children and for them to become more financially fit in the process.
Family-focused finance education is most often conducted by a professional financial consultant and focuses on ways in which employees can provide their children with essential financial lessons through everyday activities and conversations. In many cases, employees are invited to include their spouses/partners in these activities and may even provide a child care service during the event to encourage attendance.
Helping employees to become educators
The current generation approaching retirement is on tap to transfer more than $40 trillion to their children and grandchildren. As we move toward that benchmark, financial literacy for the younger generation is gaining importance. Many families are wondering how to craft conversations around this eventuality to ensure that the legacy they have built over their lives remains safe.
If older parents do not know how to approach such financial conversations — and if the current generation of parents also does not know where to begin — this presents a problem. We are faced with the potential of a great deal of money being transferred over to the fiscally ignorant, putting these assets at risk.
Much of today’s unsuccessful wealth succession is because of a lack of trust and a breakdown of communication where money is involved; which is why underscoring the importance of this type of learning is so important during youth.
How you, as an employer, can benefit
While we can see how important financial education is, you might wonder why it should be on the onus of the employer to deliver it.
Offering financial education gives employees a better chance at being financially responsible and stable, while also potentially removing a common stressor which often impacts job performance. Employees who are less tense about financial woes are often healthier (resulting in less days missed from work), happier, and subsequently, more productive.
As an employer or HR professional, adding family-focused benefits are important in terms of employee retention. Looking beyond the obvious and supporting the roots of family stability will go a long way toward maintaining the wellbeing of your employees, their families, and their future financial health.