Public Service Announcement: The world is on the verge of yet another financial apocalypse, and it’s basically all our fault.
It seems that our egregious lack of financial knowledge is leading both “the economy and society” down the path to mass destruction, that according to a new report from George Washington Global Financial Literacy Excellence Center (GFLEC) and PwC.
*Cue onslaught of indignant think pieces from the 55 and older crowd*
A Bleak Financial Standing
While we surmise that our so-called “knowledge deficit” will do little to incite a cataclysmic tailspin into the negative, the report does uncover some embarrassing stats.
Out of the 5,500 millennials surveyed, only eight percent, or roughly 440 people, exhibited “high financial literacy,” such as understanding the concept of inflation, while 24 percent demonstrated a “basic understanding” of financial knowledge.
The report also found that most millennials (52 percent) are unhappy with their current financial situation and that 50 percent would struggle to deal with an unexpected emergency costing around $2,000 (holler!).
What’s worse, some 30 percent of those surveyed regularly overdraw on their checking accounts, 53 percent have carried over a credit card balance in the last 12 months and 80 percent of college-educated millennials have at least one outstanding loan.
And for the cherry on top. It seems that our financial instability has led to us not giving a f*ck about our futures; 17 percent of those surveyed took out loans against their retirement account, while 14 percent took out a “hardship” withdrawal.
The Path to Economic Destruction
True to form, experts doubt our ability to dig ourselves out of these steep financial graves, and if this report is any indication, we definitely don’t have the tools or knowledge to do so.
“Millennials represent 80 million shoppers,” said PwC partner Steven Barr in an interview with Yahoo Finance. “It’s very important to the economy that the millennials really get their act together from a financial literacy standpoint. It’s just time to begin to take on the responsibility.”
Thank you for the insightful advice, Steven.
While we may not be inciting an all-out financial crisis tomorrow, the idea that our financial recklessness may prove destructive in the future definitely holds some weight.
The worry is, if our money management skills, or lack thereof, become the norm, financial irresponsibility and economic fragility won’t just be our problem; it’ll be everyone’s. Cheers.
“Millennials’ financial practices are of concern because of the potential for these behaviors to become firmly established,” said the report. “Indeed, the research has documented that the gap between the amount of financial responsibility given to young Americans and their demonstrated ability to manage financial decisions is rapidly widening.”
It’s almost too easy to blame our struggles on the very real economic and political circumstances extending far beyond our control. From a higher education system that drains our bank accounts to the devastating lack of Econ 101 in high schools, the stacked deck is undeniable.
That being said, allowing said deck to smother us into an apathetic silence will get us nowhere. We’re better off holding ourselves accountable and taking matters of financial literacy into our own hands. Why not at least try to turn a triple negative into a double negative?