Photographed By Rockie Nolan.Is it just us, or does looking at your bank statement make you really, really nervous? Well, a new study from the FINRA Investor Educational Foundation found millennials — those born between 1978 and 1994 — have some pretty unhealthy money habits.
According to the cross-generational study — which compared millennials, Generation Xers (born between 1963 and 1977), baby boomers (1946 to 1962), and the silent generation (1945 and earlier) — our understanding of good financial practices kind of sucks. Only 18% of young millennials, ages 18 to 26, show high levels of financial literacy (meaning they can answer four or five questions on a five-question literacy quiz correctly). And, perhaps not surprisingly, millennials engage in more costly credit-card behaviors — such as paying only the minimum every month — than older generations.
Despite the dire financial situation many of us may face on a daily basis, millennials reported similar levels of financial satisfaction to Gen Xers and baby boomers. So what gives? Considering their age during the Great Recession (remember when gas sold for more than $4 a gallon?), the study’s author says they may have different financial expectations than their predecessors. Since they experienced the wake of countrywide economic downturn, it’s possible many think it can only get better from here. The author also cites the fact that they're still relatively young compared to their wiser, more experienced elders as a reason for our lack of fiscal knowledge.
Yes, the stats from this study are grim — nearly two-thirds of millennials make less than $50,000 a year in household income (yet it’s likely they'll be the most-educated generation in American history…so much for that degree), 23% spend more than they make, and 31% have unpaid medical debts. Still, the author thinks more are participating in financial-education programs or have been offered financial education, compared to previous generations. As a milleniaI, I haven’t exactly had anyone knocking on my door offering guidance, but maybe as a whole we’re not totally screwed after all. (FINRA)