David Lerner Associates News

The Financial Education of Millennials

Core Facts


Monday, July 9, 2018

Studying how people of different ages demonstrate their financial literacy is a fascinating exercise, one made only more interesting by the coming-of-age of Millennials.

Studies suggest that even with greater financial burdens from economic uncertainty and student loans, they are still lagging behind in basic financial education.  Modern life has brought new challenges, and Millennials are feeling some of those challenges more keenly than others. There now appears to be a significant gulf between real financial literacy and financial confidence. Millennials don’t really want for confidence, on average, but a surprising number of them do lack a basic understanding of finance. 

And while there are examples of some schools and universities now folding financial literacy into their curriculum, it clearly isn’t enough. A recent survey found that 87% of all Americans believe that financial literacy should be taught in school. And that sentiment is echoed in the feelings of Millennials themselves. The same survey showed that 60% of young people feel that a financial literacy test should be a requirement for high school graduation. 

The problem may be that in the minds of the students, there is no clear and applicable use for an education in fiduciary skills. Why should they learn about balancing a checkbook when they don’t even have a checking account yet? It’s the equivalent of those who have no interest in becoming a quantity surveyor. Why would they have any need for learning about advanced calculus and parabolas?

So while budgeting, debt, savings, and other personal financial basics may be essential tools to a grown adult in the workaday world, these subjects are unlikely to motivate the interest of a high school student who still relies on his/her parents to make these household decisions for them.

Perhaps a “financial driving test” should be implemented before any student loans are approved. This might sound like a crazy idea but think of the consequences. If a student is not able to pass a basic personal financial test, then they won’t be approved for a student loan. How much money might be saved? How many educated or semi-educated students would be the result? It may not be such a crazy an idea after all.

And it would force parents, students, and teachers alike to engage in the subject in a far more meaningful way, with real-life application staring them in the face.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.

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Author: Sally Falkow

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
Zimmerman/Edelson
516.829.8374 X 232
jmendlinger@zimmed.com

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    Jake Mendlinger
    Account Manager
    Zimmerman/Edelson
    516.829.8374 X 232
    jmendlinger@zimmed.com
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