Millennials May Be Overstating Their Financial Literacy
Millennials may have a false sense of confidence about their personal finances according to a new report from Bank of America and USA Today. Even though two-thirds of Millennials said they have good financial habits, their practices paint a different picture.
In a survey of 1,000 adults, aged 18-34, 53% said they are living paycheck to paycheck. 22% said they have not started saving for the future, and 35% still receive financial help from parents or relatives.
Part of the problem with this generation’s financial abilities is the fact that they are focusing more on short term goals than long term goals. For instance, 33% of Millennials are saving for vacation, while nearly the same amount–32%–are saving for a house.
“Many young adults have great confidence in their financial situations, but we can’t ignore the fact that so many are living day to day, not able to prepare for their financial future,” said Andrew Plepler from Bank of America’s Global Corporate Social Responsibility team.
Another issue facing Millennials is in their ability to spend within their means. Nearly 57% of participants said it is “really difficult” for members of their generation to not overspend. Over one-third of the respondents (36%) said excess spending is one of their top causes of stress.
One in five Millennials surveyed still live at home with their parents, and 80% said they know someone their age who gets help from a parent or family member.
All of these statistics indicate that Millennials aren’t as financially well off as they may feel.