by Cortney Meng
Despite the fact that today’s youth have grown up in the era of mobile banking, digital wallets and financial services platforms—from Venmo to Splitwise—a number of millennials feel ill-equipped to handle their finances. In fact, according to a survey of 1,640 college students, as part of U.S. Bank’s 2015 U.S. Bank Students and Personal Finance Study, 50 percent of coeds would give themselves a “C” or below when it comes to how successful they are in managing their money.
What’s more, the survey found that:
• More than 60 percent of college students have little to no knowledge of investments or retirement savings.
• Twenty-one percent of students are barely keeping up on day-to-day expenses, with only 5 percent prepared for unexpected expenses.
• Only 39 percent of students correctly know that paying off a delinquent loan or credit card balance is not enough to remove it from a credit report.
So how can today’s millennials start better preparing for their financial future? To begin, young adults can get a good handle on their current financial situation by asking themselves questions like:
• Am I currently in debt? If so, if I continue down the same payment rate, at what point will my debt be paid off?
• Do I have any major financial decisions ahead that I need to start prepping for today, e.g., buying a new car, saving for a house or merging accounts with a soon-to-be spouse?
• How am I currently saving for retirement? Have I started a 401k investment? Am I investing in stock? Do I have an IRA?
The answers to these questions can help guide them down a specific financial path. Youth who are in debt can begin to set budgets and reduce their lines of credit to make payments more expediently. What’s more, they can create a detailed document listing the interest rate, balance and minimum monthly payment of all their debts to stay on track of payments.
In addition, young adults may want to consider consulting with a reputable financial advisor, either formally or informally. For instance, a lot of banks can pair members with financial coaches and advisors who specialize in everything from wealth and asset management to retirement planning. Here at The Milford Bank, for instance, our resident expert John Kuehnle is always on hand to make recommendations and provide financial direction based on the information provided to him.
Millennials can also spend more time discussing their finances with their parents, especially since the survey found that 91 percent of students learn about money from their parents, either directly or by example. Moreover, 55 percent of students identified their parents as the No. 1 influence on their financial habits, as well as their go-to source for financial advice.
Are you a millennial just starting out on his or her career? Are you looking for additional financial resources? Be sure to check out our learning center, where you can pick up tips and tricks on everything from how to pay for college to how to employ basic investing strategies.