The Benefits of Financial Education in the Workplace

by | 07/16/13 | Commentary, Insight, Uncategorized

Among the many important benefits of greater financial wellness is the major impact it has on worker productivity.  Specifically, research has shown that addressing employee financial wellness results in the improvement in workplace productivity, employee morale, and company loyalty, while reducing absenteeism, turnover, and workplace distractions across the company.  These factors also contribute to the employer’s bottom line.

Research from the non-profit Personal Finance Employee Education Foundation™ reveals that as many as 32% of Americans may be seriously in debt.  This severe level of financial stress not only impacts their productivity at work, but also may cause them to develop health concerns.

The research re-validates the Personal Financial Wellness Scale™ (http://www.pfeef.org/scale/well-being.html).  Previously the PFW Scale™ was validated in 2004.  The scale, which measures financial well-being, determined that the number of those most at risk remains substantial at 32% although only up slightly from 30% previously.  However, for those who were just getting by, the numbers increased 16 percentage points from 28% in 2004 to 44% in 2012.  By contrast, those Americans with little financial stress decreased by 18 percentage points from 42% in the previous survey to 24% in the recent one.

The PFW Scale™ is a simple yet reliable instrument that the Personal Finance Employee Education Foundation™  offers to employers, financial education providers, financial advisors, counselors, and researchers to gauge financial wellness and its impact on worker productivity.

This research underscores the importance of enabling individuals to determine how they feel about their current financial situation, whether it needs improvement, and how they can access quality tools and resources in the workplace for the advancement of their financial literacy and wellness.

About the Author

Judith Cohart is President and CEO of the Personal Finance Employee Education Foundation http://www.pfeef.org/index.html. Cohart served as Money Management Manager for the AARP Foundation, where she managed a nationwide program that helps low income older people more effectively handle their personal finances. She developed financial education materials for the Web and print and a financial planning CD-ROM as well as Hispanic financial education seminars. She served as AARP representative on the board of the National Association of Personal Finance Advisors and the Coalition for Consumer Debtor Education.

Previously, Cohart worked as Executive Director of the National Coalition for Consumer Education, where she established a 50-state network of professionals from academic, business, government, and consumer organizations to promote consumer education. She provided technical assistance through conferences, newsletters, and educational materials, and she managed the organization’s budget and raised funds from major corporations, such as American Express.

She worked as School Services Manager for USA TODAY, where she developed a new approach, including materials and instructional presentations for teaching with a newspaper. This included customizing on-site training for employees in markets nationwide. Earlier Cohart worked as Director of Education/Training for the National Foundation for Credit Counseling. She developed curriculum, newsletters, and other materials, and served as staff liaison to several federal government agencies, including the U.S. Congress, and to three Board of Trustees’ committees.

She taught 11th grade American History in public schools in New Haven, CT and Orangeburg, NY, and was principal of an alternative high school in Valley Forge, PA. In addition, she supervised student teachers from Swarthmore College and the University of Illinois. Cohart served as a Legislative Assistant to Congressman John J. LaFalce and provided policy analysis, research, and writing on a variety of issues.

Cohart has a B.A. in Government from Cornell University, an M.A. in Teaching/History from Yale University, and a J.D. from Catholic University. She is a Member of the District of Columbia Bar. Cohart was twice elected president of a national professional association, the Association for Financial Counseling and Planning Education (1999 and 2006). On January 1, 2010 Cohart began her service as President of the Personal Finance Employee Education Foundation.

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