Millennials Struggle To Learn Basic Personal Finance
Millennials continue to struggle with basic financial literacy on investments, credit, debt, budgeting, and other common areas of personal finance, according to the study conducted by the George Washington University Global Financial Literacy Excellence Center and PricewaterhouseCoopers.
One of the main problems millennials continue to face is having an enormous debt burden due to student loans and credit cards with not a whole lot of savings. With that said, there is surprisingly no direct correlation between students who studied in a higher education environment and adults with no college degree. That shows how personal finance is just not taught in classrooms and instead usually being taught by parents.
Financial illiteracy then makes young adults unable to budget which can create a personal deficit, and stops them from investing in retirement because of fear and the fact that most believe they need lots of money.
One problem that is prevalent throughout the United States is that there are relatively few states that require a personal finance class during high school. Offering these courses can help Millennials tremendously as it will be a more practical course that students will be guaranteed to use during their life time.
As a matter of fact, CEO Susan Beachman of financial literacy firm, Money Savvy Generation, which provides financial literacy to elementary students, said in her recent interview in USA Today “My dream is that people get it in kindergarten and first grade. Parents say, ‘I have so much time; they’re so young.’ You don’t teach your young child to brush their teeth at age 18.”
There are some great free resources millennials can utilize to better understand personal finance. I learned a vast amount of information just by listening to Dave Ramsey, a personal finance guru, on YouTube for free. He goes on rants sometimes and also has a section of the program that shows people getting out of tens of thousands of dollars in debt and how they did it.
Another good resource is to watch videos from Khan Academy with the partnership with Bank of America.
Much of personal finance is not hard; it’s just about behavior. Dave Ramsey even stated in one of his videos that it is about twenty percent knowledge and eighty percent action. We know we shouldn’t buy that brand new shoes that cost one hundred dollars, but we do it. To educate the millennial population, it has to be a collective effort between parents and school. Once we get that, the society as a whole will become much more intelligent financially.