“Human behavior flows from three main sources: desire, emotion, and knowledge.” Those wise words from Plato are certainly evident when discussing personal finance. All three sources are significant, but a lack of knowledge has the power to drive behavior and cause the most damage to your financial health. Unfortunately, America’s upcoming generation is displaying low levels of financial literacy.
Millennials — generally considered those born after 1978 — are engaging in problematic financial behaviors and express concerns about their debt. According to a recent study by the Financial Industry Regulatory Authority (FINRA), only 24 percent of millennials are able to answer four or five questions on a simple five-question financial literacy quiz correctly. That figure drops to just 18 percent among those from 18 to 26.
“Many millennials began their adult lives in the midst of the worst economic downturn in generations, and our survey reveals just how deeply and broadly the Great Recession has marked the financial lives of this generation of Americans. Unfortunately, far too many millennials trying to cope with these economic conditions have low levels of financial literacy and are wrestling with concerns about their debt,” said FINRA Foundation President Gerri Walsh in a press release.