How can you expect your employees to know what’s at stake in your business if they don’t know how to handle their finances? Employees who are always in debt have a questionable understanding of how to build your business. How can you trust them to understand what your business needs financially if they can’t even take a hold of their own money? Teaching employees how to handle their finances should be one of the priorities of any business. They will be more in tune in helping your company reach its bottom line.
Budgeting and financial management are not people’s strongest suit. You’ll mostly meet people who do not know how to handle their money than meet those who know what to do with their finances. People, in general, are so financially illiterate that they often find themselves in huge debts even before they finish their college degrees. They enter the workforce already knee-deep in debt. Once they begin building their dreams — owning a car and a house — that’s when things can spiral down for them.
Teach Them the Value of Investments
If you’re paying and compensating them enough, they should have enough money to pour into investments. Begin by teaching them how investing today will reward them in the future. You can invite an investment banker or a financial counselor to teach them how the right investments can double and secure their retirement years.
There are many different types of investments. To start them up, offer to deduct it from their salaries. After all, the money they don’t receive is the money they cannot spend on mundane things. By directly investing that money on insurance policies and the stock market, you are not giving them a choice that could be detrimental to their finances (of course, this should come with permission from your employees; you cannot interfere with their finances unless they say so).
Guide Their Investments
Those who are just starting in their investment journey will look at you for help. Guide them through it all. Talk to them about many types of investments such as those they can make in the local and foreign stock market, bonds, and mutual funds. They might also be interested in investing in minted gold and silver bars seeing as it is one of the leading producers of gold in the world. Give them access to resources and connect them to experts who can help them make the kind of investments they want.
Be Transparent About Budgets With Them
Like households, businesses follow a strict budget, too. You set aside a portion of your revenues to pay off your business loans, utility bills, suppliers, rents, and wages. Be transparent with your employees about the way you handle your business’ money. Talk to them about the importance of budgeting their money. If possible, show them a sample of your household budget so they will have an idea of how to draft their own.
Knowing that their bosses do not spend more than what they make will help them understand how valuable it is to live within their means. Believe it or not but every year, fewer people are budgeting their money. Instead, they’re spending what they earn, hoping that their retirement fund will tide them over once they leave the workplace.
Open a Retirement Fund
If your business can afford it, one of the best ways to teach your employees to value their money is to put up a retirement fund. They have the option to contribute to this fund. You must match their contributions to this fund to further motivate them to put in more of their money into this. While you are not required to offer a pension fund, you will have a better chance of attracting top talents if you do.
Don’t feel bad either if you’re not in a financial position to offer one now. In 2017, only 16% of Fortune 500 companies have a traditionally defined pension plan. You can help your employees know about managing finances through other means if offering a pension plan is still not within your capacity. You must convince them, however, to find a retirement plan that fits their lifestyle and that they can manage to contribute continuously.
When you have a financially literate workforce, you will notice how much happier they are with their work. The more content they are with their personal lives, the more productive they are when they go to the office. They will also better understand their roles in the company and why they should contribute to its success. Seeing eye-to-eye with your employees especially about finances will be beneficial to your work relationship.