The National Endowment for Financial Education (NEFE) has found that millennials are overconfident and underprepared when it comes to their finances in a new study conducted by the George Washington University.
“Millennials are known for having unrelenting belief in their own abilities,” says Ted Beck, president and CEO of NEFE. “This generation is diverse and highly educated. However, their overconfidence puts them in an extremely fragile financial position, and sadly, they don’t realize it.”
24% had basic financial literacy
The study revealed 24 per cent had basic financial literacy, and only 8 per cent had a high level of financial knowledge. However, 69 per cent said they had a high level of knowledge in finances.
“What young adults don’t know about money can hurt them,” Beck said. “This is our opportunity to reach them with relevant financial education to help close the gap.”
More than half have retirement account
The study found 88 per cent of millennials are banked and 51 per cent have a retirement account. Forty per cent own homes and a quarter have invested in stocks, bonds or mutual funds.
The study found millennials are heavily indebted and borrowing against their assets, with 53 per cent of respondents claiming to have too much debt. Eighteen per cent said they are “not at all satisfied” with their financial situation, whereas only 6 per cent said to be “extremely satisfied”.