When it comes to business, a lot goes into making the team financially savvy. After all, a company is only as strong as its weakest link—and when it comes to money matters, even the slightest mistake can have major consequences. In fact, employees struggling financially are two times more likely to seek employment elsewhere. This was proven in the latest PwC Employee Financial Wellness Survey of over 3,000 workers from various industries. According to the survey results, 76% of respondents would be attracted to a company that cares about their financial well-being.
You can’t afford to let your employees fall behind financially as a business owner. Not only will it hurt your bottom line, but it can also damage your company’s reputation. Here’s what you need to do to ensure your team is financially savvy.
Show them why financial literacy is essential.
One of the most important things you can do to make your team financially savvy is to educate them about financial literacy. Financial literacy isn’t just about knowing how to balance a checkbook or save for retirement. It’s about understanding how money works and making smart financial decisions.
Educating your employees about financial literacy can help them better manage their finances, which can, in turn, help your company grow. When employees are stressed out about their finances, it can take a toll on their productivity and morale. But when they feel confident and in control of their money, they’re more likely to be engaged and productive at work.
Financial literacy education can also help employees avoid common financial mistakes. For example, many people struggle with credit card debt because they don’t understand the dangers of high-interest rates. By educating your employees about financial literacy, you can help them make smarter choices with their money and avoid costly mistakes.
Encourage them to invest.
Another important part of being financially savvy is understanding how to make wise investments. That means diversifying one’s portfolio and being careful about which risks to take. Investing can be a great way to grow your money, but it’s essential to do your research before investing. There are different investment options available, and each has its own risks and benefits.
Forex trading
One popular investment option is forex trading. Forex trading allows you to buy and sell currencies from around the world, and it can be an effective way to make a profit if you know what you’re doing.
However, forex trading is also risky, so it’s important to understand the risks involved before you start trading. You can help your employees learn the ropes of foreign trading by enrolling them in an online forex trading training program. With online forex trading training, your employees can learn about the different aspects of forex trading, including how to read currency charts and identify profitable trades. They’ll also learn about risk management and how to limit their losses.
Stocks
Another popular investment option is stocks. Stocks are shares in a company that can be bought and sold on the stock market. They can be a great way to make money if the company does well, but they can also lose value if the company performs poorly.
When it comes to investing, it’s crucial to find a broker you can trust. A good broker will help you make smart investment decisions and avoid costly mistakes. They’ll also be there to help you when things go wrong. Make sure the broker is licensed and registered with the SEC. You should also ask about their experience in the stock market and what kind of investment options they offer.
Offer retirement savings options.
A big part of being financially savvy is saving for retirement. Unfortunately, many people put off saving for retirement until they’re older and have less time to save up. This can be a huge mistake, as you need time to allow your savings to grow, so they’ll be enough when you retire.
One of the best ways to save for retirement is to use a retirement savings account. Each retirement savings option has its own benefits and drawbacks. Here are a few of the most popular retirement savings accounts:
401(k)
A 401(k) is a retirement savings account offered by many employers. It allows employees to save money for retirement while also receiving a tax break. The money in a 401(k) account can be invested in a variety of ways, including bonds, mutual funds, and stocks.
One drawback to a 401(k) account is that you may be limited in how you can invest your money. And if you leave your job, you may have to pay taxes on the money you’ve saved in your account.
Individual retirement account (IRA)
An IRA is another popular retirement savings option. With an IRA, you can save up to $5,500 per year (or $6,500 if you’re over 50). You can invest the money in an IRA in different ways, including stocks, bonds, and mutual funds.
However, one disadvantage is that you may have to pay taxes on the money you’ve saved in your account when you retire. Another downside is that you can’t contribute to an IRA if you earn more than $118,000 per year.
Roth IRA
A Roth IRA is similar to a traditional IRA, but there are some key differences. With a Roth IRA, you don’t have to pay taxes on the money you save in your account. This can be a great option if you think you’ll be in a higher tax bracket when you retire. Another advantage of a Roth IRA is that there are no limits on how much you can contribute each year.
The downside to a Roth IRA is that you can’t withdraw your money penalty-free until you’re 59 ½ years old.
Health savings accounts (HSAs)
HSAs are another popular retirement savings option. HSAs allow employees to save money for medical expenses while also receiving a tax break.
The most significant advantage of an HSA is that it’s triple-tax-advantaged. You get a tax break when you contribute money to your HSA, when the money grows in your account, and when you withdraw money to pay for medical expenses. In addition, you can contribute any amount every year.
The disadvantage to an HSA is that you can only use the money in your account to pay for qualified medical expenses.
Final thoughts
Building a financially savvy team doesn’t happen overnight—it takes time, effort, and dedication. However, it’s well worth the investment. By helping your employees plan for the future, you can set your team up for success both now and in the years to come.
