Getting through the early part of a career can be difficult for many young people when considering financial hurdles. This is especially true for those who aren’t well-versed in financial literacy, which could hurt their ability to create a strong personal finance plan.
Just 24 percent of millennials were able to correctly answer between four and five financial literacy questions when asked, according to a report from FINRA. When looking at just those between the ages of 18 and 26, a total of 18 percent were able to do the same.
More than 45 percent of those polled noted they are worried about their debt levels, the report explained. Just 38 percent of those in the baby boomer category said the same. However, they were still in a better position than Generation X members, as 50 percent of that category was concerned about significant debt.
“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,” said Gerri Walsh, president of FINRA Foundation. “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.”
Nearly 45 percent of millennials explained they have borrowed money from pay day lenders and pawn shops, despite the high costs that come with paying back these funds, the report noted. Just 21 percent of baby boomers explained that they did this.
Americans look to improve financial situations
With the many financial hurdles people face on a daily basis, there are some who are trying to better their situation now – so their future is brighter.
Approximately 85 percent of those polled think they should cut spending now so that they have more money later on, according to a report compiled by GfK for TheStreet. However, 44 percent are worried that they are not saving enough to have a solid financial strategy for retirement.
“A lot has been written about retirement and how people should be saving more to live comfortably in their old age. But what people are still grappling with is whether there is such a thing as going overboard with retirement savings,” said Marilen Cawad, managing editor for TheStreet.