The value of financial education in the workplace cannot be disputed. Studies have shown there is a link between financial issues and reduced productivity at the job. The correlation between financial stress and health issues has also been documented. The return on investment for employers who offer financial education to staff members is strong.
When we think of financial education, group programs are usually what come to mind. Staff members gather together and learn about topics such as budgeting, intelligent use of credit, and savings either at a webinar or as part of a live speaker’s audience. However, financial education can also take place on an individual basis and should be an essential component of an employer’s commitment to a financially healthy workforce. A referral process to a qualified credit counseling agency can be a useful adjunct to the group financial education programs.
The value of an individual educational session is that it allows the counselor/advisor to tailor discussions and solutions to the particular individual’s needs. At these sessions, the first thing that happens is that a picture is taken of the client’s circumstances: income, living expenses, assets, and debt structure. Options are then outlined and discussed, as are money management tools. For some, the focus may be on a plan to get out of debt. For others, the session may focus on reaching goals such as saving more or learning to live on a budget.
It is vitally important to refer employees to a credit counseling agency that can be trusted. The Federal Trade Commission (FTC) wrote a piece entitled “Fiscal Fitness: Choosing a Credit Counselor.” The piece can be found at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm. The FTC recommends the following questions be asked before deciding on the agency to which you will be referring staff members:
- What services to you offer? (The FTC urges consumers to look for organizations that offer a wide variety of services, and not just Debt Management Plans [DMPs]. Under a DMP, credit counseling agencies try to negotiate reduced payments and interest rates with unsecured creditors, and, usually for a fee, the consumer makes a monthly deposit to the agency. The agency then disburses the funds proportionately to the creditors.)
- Do you offer information? (The FTC suggests using agencies that will disseminate free educational information.)
- In addition to helping solve the immediate problem, will you help develop a plan for avoiding problems in the future?
- What are your fees?
- What if fees are not affordable?
- Is there a written agreement or contract? (The FTC urges consumers to make sure the agency’s commitments are in writing.)
- Are you licensed to offer services in this state?
- What are the qualifications of your counselors? (The FTC strongly recommends choosing an agency whose counselors are certified by an independent entity.)
- What confidentiality assurances are there?
- How are employees at the agency compensated? (The FTC strongly urges consumers to avoid agencies that compensate employees at a higher rate if consumers choose certain services, such as a DMP.)
The FTC piece goes on to explain a DMP in more detail and then lists questions to ask to determine if a DMP is the right solution. The section ends with recommendations on how to best make a DMP work for an individual.
As you implement a financial education program in your workplace, you may want to consider helping staff members gain access to individual counseling that will tailor solutions and recommendations to their needs. It provides additional support to the educational information given to employees in a group setting.
Mel Stiller
President, Money Management International of Massachusetts
Director of Development, Money Management International


