Only 1 in 4 Millennials Demonstrate ‘Basic Financial Literacy,’ According to George Washington University Poll

Annie Holmquist | December 20, 2017 | 965

Only 1 in 4 Millennials Demonstrate ‘Basic Financial Literacy,’ According to George Washington University Poll

I was recently at a family gathering when I got into a discussion about high school math with some younger relatives. One revealed a love for math that I didn’t know existed. In fact, she surprised me by explaining that she had taken many of the advanced math classes that schools are always encouraging students to do.

As a person with only a modest math education, I was duly impressed. But then she made an interesting confession. Nodding toward her younger sister, she regretfully said, “I wish I had taken a practical math course like she did. I think it would be so helpful with the everyday financial aspects of life.”

Unfortunately, it appears that others in my relative’s generation are in the same boat. According to a study conducted by George Washington University in early 2017, only 24 percent of millennials demonstrate basic financial literacy. (Although 69 percent gave themselves high marks in financial knowledge.)

Their biggest financial problem? Debt.

“Two-thirds have at least one source of long-term debt (student loan, home mortgage, car loan), and 30 percent have more than one source of outstanding long-term debt. More than one-third have unpaid medical bills. About 20 percent of those with a self-directed retirement account either took a loan or made a hardship withdrawal in the prior 12 months.”

Dismal numbers like those make a little more sense in the wake of a new report on the state of financial literacy instruction in the nation’s schools. According to the report from Champlin College’s Center for Financial Literacy, only a handful of states receive top grades, meaning that they require students to have at least 15 hours of personal finance instruction before graduation.

On the other end of the spectrum, however, 62 percent of American high school students live in states that require less than 15 hours of financial instruction in school. Interestingly, some of the states that received a failing grade, including Pennsylvania, Rhode Island, Connecticut, and Delaware make up four of the top five states with the highest average amount of student loan debt.

Financial Literacy by State

If we want to free our young people from the chain of college debt, do more schools need to incorporate financial literacy instruction into their curriculum? And until they do, is it up to parents and young people to educate themselves in these important life skills?

[Image Credit: Flickr-Tax Credits (CC BY 2.0)]



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