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Boosting Financial Empowerment in the Workplace

Emily Koochel June 29, 2022

There is a growing expectation that employees look to their employers for more than just a paycheck. In today’s competitive market, workplaces must support their employees with a holistic view that encompasses their health, wealth, and career.

To start fulfilling more of that total satisfaction, employers need to think about enriching their workplace programs with financial education.

Over the years these programs have emerged more prominently with the rise of employer-sponsored retirement programs, such as 401(k) plans. However, the scope is often limited to financial education of the employee plan. It doesn’t address the wide financial knowledge gap that likely exists amongst a varied workforce.

This approach often leaves benefits underutilized, and employees left vulnerable and unprepared for the unexpected events met in everyday life.

Employee Need Grows as Complexity Increases

Concerns about finances are not limited to those who are facing economic hardships. In fact, it extends to any individual that perceives that their resources are insufficient or inadequate to meet their financial needs.1 Across different measures of market sentiment, there’s evidence that people today are feeling overwhelmed and worried about their money.

In our own survey of consumer investor trends conducted in December 2021, the top concerns for the year ahead were gas prices, inflation, and retirement savings.2 It’s worrying that investors’ top concerns encompass the baseline to feeling good about one’s money: control over daily finances, financial preparedness for emergencies, and financial goals and aspirations for the future.

The barrier to how confident investors feel over their money widens when you consider the increasing complexity of financial tools—and the markets in which they operate today.

Financial conditions and opportunities change continuously and rapidly. Many in the general public lack the financial knowledge and literacy required to be good consumers of these tools.

Lower Financial Knowledge Creates Sub-optimal Decision Making

A lack of understanding of financial services and the basics of personal finance may lead to a perpetual cycle of poor financial decisions. As a result, the repercussions can impact employees’ well-being and restrict their mobility in life.

Low levels of financial knowledge cause many Americans to struggle with the basic concepts necessary for proper budgeting, saving, and financial decision-making.

Moreover, a lack of knowledge related to basic financial concepts, such as compound interest, the effects of inflation, and fundamental risk diversification, is associated with sub-optimal financial decision-making.

For example, deficits in financial knowledge have been associated with negative financial behaviors, such as taking on high-interest rate mortgages, neglecting to save or invest, and over-borrowing.3

And it doesn’t end there. Lower competency or financial illiteracy can impact employees’ mental health as well.

Financial anxiety is a clinical diagnosis, derived from generalized anxiety disorder.5 The effects linger for employees, with financial anxiety responsible for feelings of irritability, difficulty sleeping, and trouble focusing on work.

Education as a Natural Extension to Expand Workplace-sponsored Programs

The compounding effects of making poor financial decisions is difficult for employees and their families to overcome. Because financial stress and financial anxiety cannot be dismissed when an employee is at work, this is an area that workplaces have a vested interest to better support.

In general, many workplaces are already providing employees with vehicles to save and incentivizing retirement preparedness through employer-sponsored programs. But perhaps it’s time to rethink one-time workshops centered around the plan as the dominant means of education.

Redefining the Financial Education Roadmap

What many American workers need is an education in core financial planning. They need the basics of debt management, budgeting, retirement planning, and retirement income planning. These core financial concepts are essential for everybody, regardless of how much wealth they have.

Increased financial knowledge has been linked to positive financial behaviors; such as possessing an emergency fund, using savings and checking accounts, paying bills on time, tracking expenses, planning for retirement, and spending less than income.

Offering education on a variety of financial planning topics could be particularly beneficial to serve a wide spectrum of employees with valuable and relevant content. In addition, having a robust library of financial planning articles or educational courses would also facilitate self-service for help-seeking employees.

Help-seekers proactively define their problems, search for an individual (or other source) to help them, and attempt to implement help provided. To best serve help-seekers, workplaces should think about education delivery in a convenient, on-demand model.

If employees can improve their financial knowledge from a trusted source—their employer—then they may be more likely to attribute positive changes in their financial behavior to their workplace education program.

Boosting Motivation, Education, and Empowerment with Financial Technology

The connection between employees’ money and mental well-being cannot be overlooked. By addressing financial knowledge gaps, workplaces can give employees the support they need to feel financially empowered and psychologically satisfied.

Listen to the on-demand webinar “Using Technology to Boost Financial Empowerment in the Workplace” to get a better understanding of how digital technology can help more employees build their financial knowledge and connect with their financial goals.


1 Falconier, M. K. “TOGETHER – A couples’ program to improve communication, coping, and financial management skills: Development and initial pilot-testing,” Journal of Marital and Family Therapy, 2015, Sec. 41, p. 236–250. doi: 10.1111/jmft.12052.

2 2021 eMoney Investor Trend Survey, December 2021, n=2,000.

3 Lusardi, Annamaria, “Financial Literacy: An Essential Tool for Informed Consumer Choice?,” working paper, Harvard University, Joint Center for Housing Studies, Cambridge, June 2008.

Lusardi, Annamaria, and Mitchell, Olivia S. “The economic importance of financial literacy: theory and evidence,” Journal of Economic Literature, 2014, Sec. 52(1): p. 5–44.

5 Archuleta, K. L., Dale, A., and Spann, S. M., “College students and financial distress: Exploring debt, financial satisfaction, and financial anxiety.” Financial Counseling and Planning, 2013, Sec. 24(2), p. 50-62.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

Image of Emily Koochel
About the Author

Dr. Emily Koochel is an experienced financial professional, academic, and researcher. She currently serves as a leader for eMoney Advisor’s Financial Education and Wellness initiatives in her role as Manager of Financial Wellness. Dr. Koochel’s PhD in Applied Family Science and Master’s in Financial Planning provide a multidisciplinary lens to inform her work where she focuses on understanding the effect of financial behaviors and financial decision making on personal and financial wellness. She serves as a subject matter expert in the field, reviewing and authoring peer-reviewed journal articles, book chapters, and contributing to public scholarship. Most notably, she served as a co-author for the CFP Board’s book – The Psychology of Financial Planning - and was awarded 2020 Outstanding Research Journal Article of the Year by the Association for Financial Counseling and Planning Education. She holds the Certified Financial Therapist – I designation and is an Accredited Financial Counselor and Behavioral Financial Advisor.

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