Next Workplace Benefit: Financial Education–For Employees’ Kids
By Dan Kadlec
February 21, 2018
With school-based financial education having hit a wall, it may be time to ask more of large employers. The foundation is already set. We just have to figure out how to get it done.
Can we really ask employers to lead the hunt for a social cure? Yes—but not out of altruism. What’s good for the economy is good for profits. What relieves employee financial stress at work is good for productivity. Financial education at work is a win-win, and employers know it.
Money issues are a distraction at work for 28% of employees, PwC found. That’s why 93% of companies plan to focus on the financial well-being of their employees beyond basic retirement planning, Aon Hewitt found. The newest programs center on things like basic budgeting, saving for life events like a home or college, and paying off student loans. The next frontier should be helping employees learn to speak to their children about money.
Three quarters of parents are reluctant to talk to their children about finances, according to T. Rowe Price. They lack confidence or can’t find the right time. In many households, money remains a taboo topic for conversation. This is changing, but too slowly.
Children form most of their financial behaviors by age 7, according to the University of Cambridge. “These deep-rooted beliefs will shape their lives as they grow into adulthood and will play a major role in how they deal with finances,” writes financial consultant Kyle Sanders for Workforce. “Their longstanding effects will last long past adulthood. Their formed financial beliefs can affect their children, grandchildren and future generations.”
We can’t give up on classroom financial literacy instruction. Nowhere is the potential to teach young people this valuable life skill more potent. States including Michigan, Georgia, Utah and Texas are leading the charge by making courses in economics and personal finance a high school graduation requirement. But on a national scale there has been almost no progress.
Only 17 states require high school students to take a course in personal finance, according to the Council for Economic Education Survey of the States, released earlier this month. That is unchanged the past four years. The number of states that require high school students to take a course in economics is just 22—less than half the country, and unchanged from 2014.
We need to clear this logjam. Some employers are already engaged. They understand…
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…that today’s job applicants are looking closely at benefits—and often favor strong family-focused packages that include paid parental leave for both mothers and fathers, adoption benefits, and flexible child-care spending accounts. These employers see teaching workers how to talk to their kids about money as a logical extension to a financial wellness program.
How might this work? Employers could host an after-hours seminar on conversation starters and other ways to communicate with kids of all ages about money. They could invite spouses and ex-spouses that share parenting to attend. They might even provide child-care services during such an event.
Employers already host seminars and even offer one-on-one counseling for things like debt reduction, budgeting, saving and investing. That’s helpful for workers. Now it’s time to reach down another generation and help workers’ kids. After all, they are the next generation of employees. Why wait?