Manage Your Damn Money | Word on the Street | Video

How Do Millennials Spend Their Money?

Some Millennials we talked to in Washington D.C. said they spend too much money on clothes, dating and general life expenses. Others suggested that young people should spend money on experiences now rather than saving for the future — a viewpoint that has been gaining traction among some Millennials, who believe that broadening their minds and perspectives through travel is a better use of funds than saving for traditional retirement.

Are Millennials Overconfident About Money?

Research out of George Washington University and funded by the National Endowment for Financial Education (www.nefe.org) shows that Millennials think they know a lot more about money than they do.

What Millennials think they know … What Millennials actually know …

74 percent agreed with the statement, “I am good at dealing with day-to-day financial matters, such as checking accounts, credit and debit cards, and tracking expenses.”

Out of five financial literacy questions, only 8 percent answered all questions correctly.

Nearly 70 percent rated themselves as having high financial knowledge (and 75 percent of men ranked themselves as “highly knowledgeable”).

Only 24 percent answered 3 out of 5 questions correctly, indicating basic financial literacy.

21 percent reported that they are “very satisfied” with their current financial situation.

Only 37 percent of college-educated respondents correctly answered the most basic financial literacy questions.


The Financial Education Gap

  • Only 22 percent of Millennials (and 29 percent of those with college degrees) have ever received financial education from an educational institution or workplace.
  • 41 percent sought at least one form of financial advice in the past five years.
  • Those with higher financial literacy tend to trust financial professionals more than those who are less financially literate (46 percent vs. 39 percent).
  • 60 percent think financial professionals are too expensive for them, and 35 percent think it is hard to find the right financial professional for their situation.

There are many ways to get financial education, including free programs online and in your local community. Whether or not you are a student, you can sign up for a free account at www.CashCourse.org to learn about topics from budgeting and student loans to beginning investing and insurance.


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[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by the National Endowment for Financial Education.]

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