Study reveals the positive impact of financial education in the workplace

November 04, 1999

BLACKSBURG, Va. - A study conducted by Virginia Tech researchers shows that financial education and financial advice positively impacts worker money behaviors and attitudes. Three-quarters of the workers surveyed want additional financial planning advice provided at the work site as 56 percent reported their investment knowledge as beginners.

Researchers from Virginia Tech¹s National Institute for Personal Finance Employee Education (NIPFEE) conducted a study of well-educated, high-income, white-collar workers employed at an insurance company in three states in the midwest, SECURA Insurance Companies. Participants were surveyed before and after their participation in a workplace financial education program and after a private, one-on-one financial advice session offered on company time by Capital Strategies Inc.

"The employees were somewhat dissatisfied with their personal finances as has been commonly found in previous NIPFEE workplace research," says Jinhee Kim, NIPFEE research director. Forty-three percent of the SECURA employees were not satisfied with their present financial situation, and 25 percent felt as if they were always in financial trouble and found it hard to pay bills. Upon completion of the program, almost 90 percent agreed that the program was beneficial. Kim says, "The employees found that their personal finances were positively influenced as a result of the employer-sponsored financial education and advice program."

Compared to employees who have higher financial wellness, workers who were less satisfied with their personal finances have: E. Thomas Garman, NIPFEE executive director, says "Employees who participated in the workplace financial education program reported better health, were more committed to and proud of their employer, and recommended their organization as one of the best places to work."

As a result of the education and advice: Asked if they wanted additional financial planning advice if the government paid part of the cost, 90 percent of the employees said, "yes," and that they would be willing to make a co-payment. Garman says, "Smart employers and government policymakers need to take concrete action to help workers improve their financial wellness by offering comprehensive financial education and advice for all Americans."
-end-
E. Thomas Garman, executive director, Virginia Tech's National Institute for Personal Finance Employee Education; tgarman@vt.edu; www.chre.vt.edu/pfee; Telephone: 540-231-6677; Fax: 540-231-3250.

Virginia Tech

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