Millennials and financial literacy

[olds442jetaway]

Recent studies have shown that millennials have the lowest rate of basic financial literacy of any age group. The purpose of this post is not to trash millennials, but to raise awareness of this crisis and maybe tackle it before it gets totally out of control. A major recent study confirm that leas than 25% of millennial‘s have a very basic knowledge and are pretty much financially illiterate. Many were asked this question. if you have $100 in a savings account earning 2% per year, in five years will you have less than $100 the same hundred dollars, or more than $100. Many many millennials could not even get this question correct. In my opinion we had better fix this impending crisis now and fix it fast. What do you folks think? One more thing. Many many many of them also did not know that over time those that will pay the most to credit card companies on the same original debt would be the ones who skipped payments, sometimes made minimum payments, and sometimes made less than the required minimum payments.

[billryan]

Can you link to these studies? If 75% of millennial are financially literate, I'd say it's an improvement on past generations.
If you put $100 in the bank at 2% interest, with 3% inflation, did you make money or lose money?
My Mom used to agonize for hours each month, trying to reconcile her checkbook. I am not sure I ever balanced a checkbook. In fact, I don't even record the checks I write. If I send a check for $47.45, I write the amount down as $50. When I wrote a lot of checks, this disparity added up quickly and every few months I'd have a couple hundred dollars I had already written off.
Today's kids are different and have circumstances you may not fully understand but underestimate them at your own peril.

[billryan]

It's not millennials that blew up the budget deficit, nor are they the ones calling for rate cuts during an economic boom.
It's as if parents stick their kids with credit card bills from vacations twenty years ago and then complain the kids aren't financially responsible.

[notes1]

olds, first off, congrats on getting the most out of a car. you are my hero! i never much cared about cars, just transportation. during my work years, i would meet with clients advising them they needed to save more and told, they had no extra money. in the driveway were a couple of leased/bought with debt, new cars. bmw, mercedes, lexus...but they had no money for retirement savings. screwed up priorities, now in retirement, they are downsizing and living a much smaller life.

not long after being in my job, i learned on thing. it is almost impossible to convince a spender, to become a saver. have mentioned many times that schools should teach some basic 'home ec' course about savings, spending debt, investing, etc. but, i am not sure if it would really matter. there are some (too many) people whose get such pleasure from buying sh?t, it must be in their dna. not just limited to the younger generation. 21% of married seniors and 43% of single seniors count on social security for 90% or more of their annual income.

[notes1]

it is highly unlikely to have a scenario where inflation exceeds the best savings guaranteed interest rate available. to fight inflation, the fed raises rates, to curb spending and reduce demand. this rate increase would also apply to savings rates.

current inflation is 1.9%. in december and january, i moved a good size portion of money and got 3.9% guaranteed rate. had to commit to average 8 year hold time. no idea if over time this is a good decision.

'business insider' published a piece this month supporting the notion that 24% of millennials are financially literate.

personally, i do not support the idea of lowering interest rates. but, the 'feds' dual mandate is both full employment and meeting inflation target, which they set at 2%. we are below the inflation target and most of the world has much lower interest rates than the usa. the idea of keeping rates low or lowering them further, is at least, a debatable subject.

which generation is more financially literate? here is what i do know, the tools available today to be informed, are far superior to those available for generations past.

[olds442jetaway]

If you Google millennials financial illiteracy the site should come right up it’s within the site of I think it’s PWC.com by the way the percentage of literacy is less than 25% not 75% literate there are a lot of other sites talking about it but I didn’t read them all

[billryan]

If you lower interest rates now, what do you do when the next recession comes along and the economy needs a kick start?

[notes1]

life sure has some interesting twists and turns. when the obama administration ruled the land, he piled up MORE national debt than ALL other presidents combined. don't remember much complaining from the liberal minions back then.

when most of the rest of the world has substantially lower rated than the usa, we still need to be competitive.

let's see, under trump, GDP growth of over 3% (obama was first president to never achieve a single year of 3% growth), unemployment of 3.6%, record low unemployment for blacks and hispanics, near record low for woman, largest percentage wage gains were for the lower 25% income bracket, inflation below 2%, work force participation is increasing, productivity is increasing and consumer/business confidence is high. sounds pretty good to me.

under obama, the business community was worried about what new rule/regulation/mandate/tax was going to be inflicted next. this is one of the main reasons the economy lagged. he did it because he believes in big government and his base wanted revenge for all things business. now, his base wants revenge against trump, does not matter if the country will be hurt, as long as they get power.

one might not like the guy in charge now, but who wants to go back to that.