Know-It-All Millennials Need Financial Education
Credit unions recruiting members from the millennial generation could leverage their efforts off the generation’s indebtedness and lack of financial knowledge, according to a new study from the Filene Research Institute.
Gen U Personal Finances: A Crisis of Confidence and Capability drew on data collected as part of the National Financial Capability Study from respondents born generally between the late 1970s and mid-1990s, report researchers said.
Researchers found respondents in this generation had very low levels of financial literacy even though some had advanced degrees or were otherwise highly educated. They were overly represented as customers of payday lenders, pawnshops and other non-depository financial institutions, the report said.
“Even among millennials with high levels of education and income, financial literacy is typically low,” the report wrote, adding, “Credit unions can tackle this problem by developing educational resources and tools that positively impact Gen Yers’ decision making.”
The researchers also reported members of the millennial generation might be difficult to reach because they tended to have very high opinions of their financial knowledge. For example, 70% of respondents rated themselves as having high financial knowledge, but only 8% answered all five key financial literacy questions correctly and only 24% answered three of the five correctly.
“Since millennials believe they fully comprehend their financial situation, getting them to realize they lack financial knowledge can be a daunting task, demanding engaging and creative tactics,” researchers wrote.