Earning, Spending, Saving, Borrowing, and Protecting – these are the 5 core competencies that the Department of the Treasury’s Financial Literacy and Education Committee has proposed as what consumers should know and be able to do to successfully understand and make informed decisions about their personal finances. Each of these areas directly relate to your employees’ paychecks:
Earning: Gross vs. net pay
Spending: The reduced costs and tax benefits of purchasing employer-sponsored health plans
Saving: Paying yourself first via payroll deduction
Borrowing: The consequences of a 401(k) loan
Protecting: Using employer-sponsored life insurance and group LTC plan as a safety net
So how can you help in this national campaign to increase financial literacy? Workplace financial education can help employees become more empowered in making financial decisions, whether it has to do with making choices during open enrollment about their benefits, determining the appropriate level of tax withholding from their paycheck, or how much to save for retirement. But to be successful, financial education has to be action oriented and employees need to walk away with knowing exactly what the next steps are that they need to take to improve their financial situation. The Department of the Treasury is asking for your comments on how program success should be measured and what problem solving skills consumers should take from the financial education. If you would like your voice to be heard, email your comments and suggestions regarding this proposed national campaign on financial literacy to FLECstrategy@do.treas.gov.