By Jane Garcia

The Federal Government recently launched an extensive campaign called ‘Understanding Money’  aimed at improving people’s financial literacy, including advice on how to prepare a budget, set financial goals and get into the savings habit.

Employers can also play a role in improving the financial literacy of their workers, according to Catherine Birchall, CEO of Money 101: Money for Life, a company assisting organisations to provide personal financial education for employees.

Launched in February 2005, the program gives employees the tools to make more informed money decisions and is provided in a non-product specific context.

“People don’t just go to work and leave everything behind,” she says.
“Finances are one of the major concerns that people have and if you’re an effective employer, you’re always looking at what is holding people back from being more productive and getting more done in a day. Financial problems is one of the key factors.
“More than ever, employers need to evidence that they are good employers and they are going to give staff as much as they can and assist them in all areas.”

The company conducts confidential questionnaires of participants and has found some common questions across employees: how to find a good financial planner; what do you take to a financial planner; and how to deal with retirement and estate planning.

Ms Birchall says one of the main financial mistakes people make is overusing their credit card and accumulating debt. Another significant error some people make is leaving paid work without having done the sums to see if they can realistically afford retirement.

“Probably the biggest surprise is that we have a question that says ‘do you know how much money you’re gong to need to retire?’ and you get between 80 and 90 per cent of people saying ‘no’ or ‘unsure’,” she says.

The survey also gives employers an indication of the retirement intention of their staff in the next 12 months, allowing organisations to work on strategies for the retention of older workers and/or recruitment plans.

Money 101 works with employers in both the private and public sectors, including VicRoads. The program was rolled out as part of VicRoads’ employee wellness program.

“When they went out and spoke to staff about what they really want, they said they want financial education and assistance with career development and career pathing,” Ms Birchall says.
“I think it is being seen as a higher order-type need than things that are traditionally provided, like childcare and gyms and things like that. This is inline with corporate strategies of developing your staff and their emotional intelligence.”