Millennials are those born between 1980 and early 2000s. They are better educated, more ethnically diverse and economically active than the generation before them. On the other hand, they face the worst economic uncertainty and students’ loan than Baby Boomers. Since millennials carry a great financial threat on their shoulders, they need to head into financial security. Thus, financial literacy for millennials is significantly important.
Sadly, a study conducted by PwC on 5.500 millennials found that only 24% of them had adequate financial literacy. Besides, the research also reveals that 80% of the respondent have one or more long-term debt.
If they don’t start to learn how to manage their money now, they will jeopardize their futures.
Read more: Dear Millennials, Have You Invested Your Money?
Being more Frugal
Many studies show that most of the millennials often use future earnings to satisfy today’s desires. Putting the cost of a new pair of shoes on their credit card and paying it over several months. That decision makes less sense than saving up the money first over several months to buy a new pair of shoes. Paying everything with cash can help them to encounter an unfortunate event. That event may come in form of job loss or medical emergency.
Being more Logical
The same study mentioned above reveals that young investors investment behavior. They can make emotional decisions instead of relying on logic. They may be super excited when the stock picks do well but feel defeated when they lose money. A financial decision should be logically made based on the risk and potential return. Tools and applications can be an alternative to help them.
Preparing the Future
Millennials’ desire to always upgrade their current life many times harm their financial future. They spend beyond the means. The study above reveals that only 36% of them have retirement accounts. 27% of them have sought financial help for saving and retirement. Their recklessness may damage their old days.
While millennials may face challenges as they start to learn financial literacy, there are ways to get help in solving those challenges. The help can save millennials’ future.
