Millennials Struggling With Debt, Financial Literacy

Millennials Struggling With Debt, Financial Literacy

Millennials are struggling with debt, monthly payments and understanding financial offerings, according to a new study from the Filene Research Institute.

Published Tuesday, May 27, 2014 by Ray Birch

 

MADISON, Wis. — Millennials are struggling with debt, monthly payments and understanding financial offerings, according to a new study from the Filene Research Institute.

 

The report, Gen Y Personal Finances: A Crisis of Confidence and Capability, paints a picture of the typical Millennial having a significant amount of debt and struggling to meet payments on both short- and long-term obligations.

 

Even more troubling, the report indicated, Gen Y's high level of financial engagement is not matched with a correspondingly high level of financial literacy.

 

Filene termed some of the key findings "alarming": 66% of Millennials surveyed have at least one source of outstanding long-term debt, whether a student loan, home mortgage or car loan; 52% of credit card users report carrying over a balance — for which they were charged interest — in the last 12 months; and, nearly 70% of respondents rated themselves as having high financial knowledge, even though responses to financial literacy questions in the study indicate Gen Y has a generally low level of financial literacy.

 

Leveraging the most recent National Financial Capability Study, the report examines financial capability among young Americans ages 23-35 using data from more than 5,500 respondents. The report not only outlines the financial challenges that plague Gen Y, but shares approaches credit unions can take to help.

 

The study says CUs may be able to better serve Gen Y consumers by segmenting them according to education and income, and through financial education tools addressing debt and debt management.

 

The report also builds on more than 10 years of Filene research examining young adults' financial needs and projects aimed at helping credit unions engage young adults.

 

The report is the first in a research project examining Americans' financial capability from Filene and the George Washington University Global Financial Literacy Excellence Center.

 

(c) Copyright 2014 Credit Union Journal. All rights Reserved.

 

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