Millennials Face Financial Struggle

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Millennials Face Financial Struggle
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Millennials struggle financially. ©iStockphoto.com/Feverpitched

If you're part of the millennial generation, your financial life is probably no walk down easy street.

A new study by the FINRA Investor Education Foundation, The Financial Capability of Young Adults—A Generational View, reveals that millennials—those 18 to 34—show concern about their debt, engage in problematic financial behaviors and display low levels of financial literacy.

Survey results paint a troubling financial portrait of the millennial generation:

• Almost half (46 percent) of millennials are concerned they have too much debt. This is slightly less but on par with gen Xers (50 percent). But it's much higher than the 38 percent of baby boomers and 23 percent of respondents from the silent generation who feel they have too much debt.

• Forty-three percent of millennials engaged in costly non-bank forms of borrowing in the last five years, like using pawn shops and pay day lenders. By contrast, 21 percent of boomers and 8 percent of the silent generation used non-bank forms of borrowing.

Recent economic events play a role in the millennial generation's financial struggle. Many millennials began their adult lives in the midst of the worst economic downturn in generations, and this survey reveals just how difficult coming of age in the midst of the Great Recession has been for this generation of Americans.

Millennials and Financial Literacy

In addition, low levels of financial literacy hamper most millennials. Only 24 percent of millennials were able to answer four or five questions on a five-question financial literacy quiz correctly.

And among young millennials—those 18 to 26—only 18 percent were able to answer four or five questions correctly.

Somewhat surprisingly, The Financial Capability of Young Adults also found that despite the higher financial strain that millennials face, they express levels of financial satisfaction that are on par with gen Xers and boomers.

For more information about saving and investing, go to www.finra.org/investors.

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