A study of 5,500 individuals on millennials and financial literacy conducted by PricewaterhouseCoopers and George Washington University confirmed that millennials (ages 23 – 25) have an alarmingly low level of financial literacy, which could have “disastrous” effects on the economy.
Have inadequate financial literacy
When tested on financial concepts, only 24% demonstrated basic financial knowledge.
- Aren’t happy with their current financial situation.
- When ranking satisfaction on a scale of 1-10, 34% were very unsatisfied.
- Worry about student loans.
- When asked about their ability to repay their student loan debt, more than 54% of Millennials expressed concern.
- Debt crosses economic and educational lines’.
- Among college-educated Millennials, a staggering 81% have at least one long-term debt.
- Are financially fragile.
- Nearly 30% of Millennials are overdrawing on their checking accounts.
- Are heavy users of Alternative Financial Services (AFS).
- In the past five years, 42% of Millennials used an AFS product, such as payday loans, pawnshops, auto title loans, tax refund advances, and rent-to-own products.
- Sacrifice retirement accounts.
- More than 20% of Millennials with retirement accounts took loans or hardship withdrawals in the past year.
- Don’t seek professional financial help.
- Even with inadequate knowledge, only 27% of Millennials are seeking professional financial advice on saving and investment.
This is an American sturdy but the results would be the same for Canadian Millennials. The Canadian Foundation for Economic Education was beefed up on July 30, 2014 when Minister of State (Finance) Kevin Sorenson and Canada’s Financial Literacy Leader Jane Rooney announced the appointment of 15 prominent Canadians to the National Steering Committee on Financial Literacy, among them Gary Rabbior, President and CEO of the Canadian Foundation for Economic Education. A key responsibility of the National Steering Committee will be providing leadership and support for Ms. Rooney in the development of a Financial Literacy Strategy for Canada.