April is Financial Literacy Month, hosted by the National Endowment for Financial Education and The Jump$tart Coalition for Personal Financial Literacy.

Financial health is a pillar of employee well-being. Yet, many Americans remain financially undereducated. In a 28-question financial survey by the World Economic Forum, most respondents could only answer about 50% of the questions.

Low financial literacy is linked to higher levels of stress and anxiety. It’s also connected to employee stress, which has a major effect on mental health and performance at work. Employees who don’t receive help from their employers through financial wellness programs are more susceptible to stress, burnout and an overall lower quality of life.

Here are 4 urgent reasons to make Financial Literacy a priority in your workplace.

1. Nearly 3 in 4 workers say they can only meet their most basic living expenses

According to a survey from Resume Now, 73% of respondents claimed they couldn’t afford anything beyond their basic living expenses. Living expenses, which include rent, utilities and groceries have all gradually increased (adjusted for inflation) while wages have generally stayed the same. This reflects the volatility of the current economic climate but also highlights potential gaps in financial knowledge.

Better financial literacy includes effective budgeting skills and finding ways to optimize their current expenses. In 2023, the United States Census Bureau found that over 21 million renter households spent more than the recommended 30% of their income on housing costs. In the Resume Now survey, 55% of respondents described housing as their main source of financial stress. Individuals with stronger financial education may better understand the long-term implications of housing choices, including how much they can spend with their income.

Most employees who live paycheck to paycheck often have little saved for financial emergencies. When workers focus on their next rent payment, or credit card debt, their productivity and engagement at work suffer.

2. One in four workers has delayed saving for retirement due to inflation

A lack of financial literacy may result in misinformed decisions that can have lasting effects on your workforce. According to research from TIAA, 25% of employees in a study decreased the amount they saved for retirement due to inflation. Nearly half of these same employees stopped saving completely. The ability to save for retirement is a major boon for employees, but those who cannot suffer major consequences. Without financial literacy, employees will be more stressed now and less prepared for retirement when the time comes.

This continues to be a struggle for nearly half of employees. U.S. adults correctly answered only 48% of the questions on average, on the P-Fin Index (a survey that rates financial literacy). The Index saw particularly low scores among younger generations and certain racial/ethnic groups.

3. 39% of Gen Z lack financial literacy skills and see debt as a normal part of their financial life

Generation Z (individuals born between 1997 and 2012) are disproportionately affected by a lack of financial education. According to WalletHub, more than 25% of Gen Zers say they are not confident in their financial knowledge and skills. Less than 20% of Gen Z and Gen Xers say they can manage their debt. This deficit is made worse by the fact that Gen Z is the age group most impacted by inflation.

Gen Z are the most financially stressed generation. This stress is due to several key factors: economic uncertainty, increased cost of living and rising debt levels. There are also major societal expectations amplified by social media. Young employees see other successful individuals and may feel behind in life when comparing themselves to others. 72% claim that these pressures contribute to their financial trauma.

Generational differences also play a part in the buildup of financial stress. According to the survey, only 35% of Gen Z respondents discuss money during times of stress. These combined pressures create unique challenges for a generation entering adulthood during periods of
economic instability and increased cost of living.

4. Employees who are more stressed over their money management have a higher rate of burnout and lower job satisfaction

Burnout is a major issue affecting employees, especially those with financial stress. A survey from the University of Georgia found that employees dealing with money management issues were also more likely to have increased issues at work.

The survey included over 200 full-time US employees who dealt with burnout symptoms (depersonalization, emotional exhaustion, and reduced sense of accomplishment) due to their financial situation.

The research suggests that addressing financial concerns could help reduce burnout, with employers potentially benefiting from offering financial wellness services to employees.
Employees dealing with money worries might spend time at work dealing with personal financial issues, show higher absenteeism, and experience more health problems. By addressing financial stress through educational programs, employers can directly impact burnout rates and improve job satisfaction, leading to a happier and healthier workforce.

5. About half of workers believe employers have a responsibility to help them maintain and improve their financial literacy and wellness

Employers increasingly offer financial wellness programs to help workers make better financial decisions and manage workplace benefits effectively. Important financial decisions are constantly being made at work, yet many employees feel unprepared to navigate complex benefits options while dealing with personal financial stress. These programs vary widely but typically include educational resources, workshops and budgeting tools. By 2026, nearly half of employers expect to offer comprehensive financial wellness services, according to Transamerica’s research.

The key to solving this stress is a comprehensive financial wellness program. Financial wellness programs can help start the conversation while providing practical strategies for debt management and building positive financial habits early in their careers.

This expectation from employees represents both a challenge and an opportunity for employers. Workers increasingly see financial wellness benefits as an essential part of a comprehensive benefits package. Companies that respond to this expectation can stand out by demonstrating a commitment to employee wellbeing.

Looking for a comprehensive financial wellness solution? Consider Best Money Moves.

Best Money Moves is an AI-driven, mobile-first financial wellness solution designed to help employees with varying levels of financial knowledge dial down their most top-of-mind financial stresses. As an easy-to-use financial well-being solution, Best Money Moves offers comprehensive support toward any money-related goal, ranging from debt management to purchasing a home. With 1:1 money coaching, budgeting tools and other resources, our AI-driven platform is designed to help bolster employee financial wellbeing.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.