About 70 former state inmates crowded into the Capitol Region Careerlink on a cold day in early March to learn the basics of managing their money.
Each received a pamphlet with a fictional job, fictional income and fictional expenses, then perused tables manned by volunteers to pay bills they might encounter once they fully re-enter society: car insurance, haircuts, cellphones. They also learned about credit scores and the best ways to stay out of debt.
The Pennsylvania Credit Union Association has held more than 100 such events, called reality fairs, but this one was the first to cater specifically to residents of community corrections centers. The idea is that people who know how to handle their money are more likely to lead productive lives outside of the prison system.
Former inmates aren’t the only ones who can benefit from lessons in financial literacy, and they’re far from alone in wanting to know about the basics of credit cards and staying out of debt.
People from all walks of life, from millennials to inmates to lifelong professionals, have questions about how to handle their personal finances. About 75 percent of Americans, in fact, say they could benefit from professional advice on how to make the best use of their paychecks, according to a 2016 survey by the National Foundation for Credit Counseling.
The people signing their paychecks can help them do that through workplace financial literacy programs. These courses, which have existed for years but seem to be growing in popularity, have benefits not just for employees, but also for businesses’ bottom lines.
Numerous studies over the years have suggested employer-offered financial literacy programs might increase employee engagement and increase productivity.
About 28 percent of respondents in a 2016 PricewaterhouseCoopers survey said they feel stressed about their finances, for example, with 28 percent saying that stress has been a distraction at work. A separate study, published in 2012 by the health policy journal Health Affairs, found that medical expenses were $413 higher for employees with high levels of stress than they were for employees who reported little stress.
Figures like these are what drove Janna Lamison to find a financial literacy program for her company’s employees.
Lamison is a human resources professional for Penn-Air & Hydraulics Corp. in Springettsbury Township, York County. The company has not, to Lamison’s knowledge, offered any kind of budgeting or credit training in the roughly two-and-a-half years she has worked there, she said, but she started researching the option after realizing such a program could help keep health care costs down.
After seeing the high pricetags of some online offerings, she turned to Penn-Air’s bank, York Traditions, for a more cost-effective alternative. Penn-Air employees can now enroll in a series of three financial literacy classes teaching everything from credit scores to budgeting through EnrichU, a workplace program offered by the bank.
“I think this is a trend you will see in more businesses as people in leadership understand that these are ways that they can invest in their employees that can help their bottom line,” she said.
She hopes the program will also prove good for morale. The best thing a company can do to retain talent, she believes, is have leaders show they care about their employees beyond what they produce at work.
So what kinds of money issues do employees need the most help with?
The National Foundation for Credit Counseling, a nonprofit financial counseling organization with member associations across the country, has seen an increase in demand for credit card debt counseling in recent years, said foundation spokesman Bruce McClary. That, he surmised, could be the result of increased faith in the economy and people feeling more confident about spending money they don’t have.
Demand for student loan debt advice is also on the rise, while foreclosure counseling has decreased as the economy moves past the worst of the 2008 housing crisis.
Many employees are also grappling with how best to save for retirement, said Christopher Hasircoglu, founder of the Lancaster County Financial Group. Hasircoglu has been an independent financial adviser for more than 25 years and has provided advice both to his clients and to employees at area companies.
Much of his business nowadays comes from people who have left work, or are preparing to leave work, and have retirement plans that they don’t know what to do with, he said. In some cases, he has to tell people that they’re probably not ready to retire, or he has to advise them not to withdraw social security too early for fear of outliving their money.
Employers can play a role in helping employees, even younger ones, understand their retirement savings options early on, he said. Such programs might not always be enough to fully explore the intricacies of every employee’s financial situation, however, in which case those employees may want to consider working one-on-one with a financial adviser or other professional.
Finding the best fit
Employers who opt to adopt financial literacy programs have an abundance of options from which they can choose. Most banks offer some form of financial literacy training material, as do the state’s Department of Banking and a range of nonprofit groups.
The best programs are ones that employ subject-matter experts, make use of technology and interactivity, and produce measurable results beyond attendance numbers in a class, McClary said. The National Foundation for Credit Counseling tries to includes these assets in its offerings, which are available to employers through the foundation’s member organizations throughout the country.
Regardless of what topic financial literacy programs focuses on, whether it’s understanding credit scores, optimizing savings or something else entirely, McClary believes they’re well worth investing in.
“Any of those things are a value added when it comes to services that employers can offer, and it’s a resource available in most communities,” he said.