Millennials have a lot going for them; better education, access to information and groundbreaking technological innovations, and more economic participation to mention but a few. However, at the same time, they have to deal with greater financial difficulties than their predecessors did.
For generations, young adults have been welcomed into the real world by the harsh realities including the hassles of finding a job, paying bills and the need to make major purchases such as a home or a car. In additions to these financial pressures of youth, millennials have to deal with inflated student debts in an uncertain economic climate. The unemployment rates are higher than ever but even for those lucky enough to have full-time professional jobs, budgeting and saving for a house or retirement seems like a far-off dream.
I recently came across an article titled “credit concerns” where an exasperated mother was expressing her bewilderment at her bank’s dubious services that destroyed her unemployed student daughter’s credit. Despite not having a savings history, the bank sent the girl a credit card on her 18th birthday and a few years down the line she was deep in debt with no way to climb out since she was unemployed. The bank knew that the girl, at her young age was predisposed to lavish spending and lacked the financial acumen to manage her personal finances. This is just an example of how such banks and other predatory entities are setting up millennials to fail.
Millennials have been described as spoiled, materialistic and saddled with a sense of entitlement but in truth, many odds have been stacked against them. According to new research conducted by George Washington University, millennials are highly engaged in their financial lives, at least on paper. Majority of them are banked, about 51% have a retirement account, 40% are homeowners and a fourth have invested in bonds, stocks or mutual funds. On the flip side, a majority of millennials are heavily indebted. They could be facing one of the bleakest financial futures in generations. The only way to survive and thrive against these odds is through financial literacy. (#FLM2018)
Where can Millennials get Financial Education?
Despite being considered least likely to seek professional financial advice, financial literacy is slowly floating towards the top of the millennial agenda. More millennials are now seeking financial education from various sources. A millennial can receive relevant financial knowledge from many sources. The trick is to distinguish misinformation that could lead you down a wrong path and potentially ruin your ability to secure your financial future. Here are some tips to help weed through the noise.
The internet has no shortage of information about every financial topic from debt management to budgeting. Getting legitimate financial information is the tricky part. Separating facts from sales pitches and predatory entities from well-intentioned programs require a keen eye and an understanding of finances. If the internet is your source of financial knowledge, look for unbiased, non-commercial resources you can trust to avoid being duped.
Banks have become a great source of financial information. If you need to understand different investment options, the ideal time to transition from a student checking account or advice on the most suitable retirement plan, bank professionals can help you. Being digital natives millennials have been the biggest beneficiaries of online and mobile banking. These platforms have given them access to invaluable financial management knowledge and tools.
Friends and Other Community Members
Some friends seem to have it all figured out as far as financial management is concerned. Some have a lot of information about personal finance topics. Blind faith is ill-advised but telling reliable information that can apply to your situation from bogus deals that may get you into financial disasters is not as easy as it sounds. You should look for unbiased seminars and workshops presented by facilitator's who are not out to make a quick buck.
Family members influence most financial decisions of millennials. This does not include watching stock prices on TV with your parents, active participation in managing the family finances builds a strong foundation for children as they prepare to leave the nest and step into the real world. It should be the responsibility of parents and guardians to empower these young millennials with financial knowledge gained from personal experience and study.
Financial Educators at School
Financial education should ideally be embedded in the school curriculum. It ought to be a life-skill course taught in class or delivered in a self-guided online learning environment. Personal finance education is a requirement in only 17 states but this does not mean that students in the other states do not have access to it. However, high schools and colleges host numerous trusted financial educators to teach students about financial management and other financial skills.
Financial education in the workplace is important since retirement planning has shifted from benefit plans to contribution plans. It takes more than answering a few questions after skimming through a human resources PowerPoint. Knowledge of the pros and cons of potential choices is necessary.
Millennial or not what been your best source of financial education? What advice would you offer someone just starting out on a financial education journey?
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. Now that Brian is debt-free, his mission is to help his three children prepare for their financial lives and educate others to achieved financial success. He blogs at Debt Discipline.