What’s the embodiment of the average millennial today? High debt, low savings and a paucity of financial literacy, at least that’s what a new report says.
According to a study authored by the George Washington University Global Financial Literacy Excellence Center (GLFEC) and PricewaterhouseCoopers, the millennial trademarks are debt, zero savings and zero understanding of personal finance, and this could prove fatal to the future of the national economy.
The reported, entitled “Millennials and Financial Literacy: The Struggle with Personal Finance,” explained that despite being labeled as the “most educated generation” close to half (42 percent) of millennials are turning to pawn shops, payday loans, auto title loans and other questionable financial services.
With all of that debt, just 12 percent of millennials have looked for professional debt management advice.
GFLEC Academic Director and Denit Trust Chair of Economics and Accountancy Annamaria Lusardi says: “”Millennials are a generation at risk. High levels of debt and low savings expose them to unexpected shocks.”
The most damning finding from the study is this: less than one-quarter (24 percent) of young adults showcased basic financial literacy. That’s dangerous.
As schools teach children and college student gender studies, trigger warnings and white privilege, these kids can’t add and subtract dollars and cents.
“The levels of financial literacy are alarmingly low among millennials—too low to expect them to be equipped to make good financial decisions,” Lusardi told Phys.org. “This is reflected in some of the statistics about their personal finances. About half of millennials don’t believe they could come up with $2,000 in 30 days if an unexpected need arose and many of those who have retirement accounts are tapping into them or overdrawing their checking accounts.”
You can thank the liberal education system for the state of financial illiteracy, for sure.
Also, the got to have it now, cannot wait and save for it advertising, helps people make bad choices.
Too many parents giving their kids everything they want, NOW!
In 1974, my 12th grade English teacher told the class on the first day, that if we did not have a grasp of the English language by now, she could not teach English to us in one semester.
What she did was teach us financial skills we could use as adults.
Balancing a checkbook, set up savings plan 10%, field trips to stores to set up food budgets, we had to do job interviews at local businesses, go for a bank loan, and car loan, rent an apartment.
The business owners in South Gate CA, were very helpful.
I am sure they saw us as future customers. I rented my first apartment from the manager who helped me with the class assignment, one year later.
I sure learned plenty, best teacher and class experience of 12th grade.
JRATT- About the same age as you. However I recall the adults of the day complaining about us being the spoiled consumption-fueled and financially illiterate generation that lost track of the work ethic. Ironically, many in the business community in fact rely on naive overspending responsively reactionary youth that largely lacks personal finance experience. Saving and being cautious is wise, but such doesn’t help the target crowd sorcing factor for those businesses.
I did not see that in the working class neighborhood, I grew up in. My first summer job at Weiser Lock in South Gate, CA in early 1972 and in other jobs in the auto repair industry. I found adults willing to help out the younger workers with a chance, as long as you were willing to step up and get your hands dirty.
No one I grew up with felt or acted like we should be given anything we did not earn. I had friends from high school who’s Dad’s owned or worked at the auto salvage yards in Watts, that I went to for parts and we got along great, we were all lower middle class and knew we would have to work hard to make it in this life.