What’s the news with millennials’ financial health? As the economy improves and millennials continue moving into the workforce, we decided it’s time to take another reading from the financial thermometer.
Millennials are pretty money-savvy.
Good news, this generation wants to handle money responsibly, and they have some good instincts. "In many ways ... millennials are more financially responsible than the Generation Xers and baby boomers who came before them," said HuffPost Business Contributor Ashley Redmond. They spend less than average. They spend more money than credit. They hesitate before snapping up big price tags.
And yet, the struggle is real.
According to a report by Pricewaterhouse Coopers and the Global Financial Literacy Excellence Center at George Washington University, within the last five years, 42 percent of millennials took out a payday loan, an auto title loan or tax refund advance; bought a rent-to-own product; or used a pawn shop, said Krystal Steinmetz at Money Talks News. What inspired these risk-fraught moves? Stress over student debt, fragile finances, lack of financial literacy and deep discontent, among other things.
Education is crucial to financial health.
The financial literacy point is important. Millennials do have some good instincts, as Redmond noted. However, the Filene Research Institute found an education gap paired with overconfidence in this generation: a dangerous combination. In a financial literacy test, 70 percent of participating millennials rated themselves highly literate, but only 8 percent answered all five questions correctly.
"Despite Millennials’ tendency to live in the 'now,' it’s imperative that they look ahead and map out their financial future before it’s too late," said Banking.com Contributor Jason Dorsey. "By taking action and gaining financial literacy early, Millennials give themselves the best possible chance of successfully navigating a very different financial world than generations before them."
Bear in mind what Steinmetz pointed out: millennials are, on the whole, financially fragile. "Just 36 percent of millennials have a retirement account," she said. "Of those, 17 percent took a loan and 14 percent took a hardship withdrawal from those accounts in the past year."
The PwC report connected the dots between present and future: "This trend is especially worrying because it can compromise millennials’ future financial security."
Essentials are needed to protect a promising future.
Both life and disability coverage are fundamental to your long-term financial plan," said Fred Decker at The Nest. Which is more important? According to Decker, there's no simple answer. However, we believe that for many millennials, the answer is paycheck protection.
While life insurance is important, statistics show that most of today's twenty-somethings (about 90 to 93 percent) can expect to live to age 60 or longer, said Business Insider. Fewer than one in 10 will die before then. Yet according to the nonprofit organization Life Happens, three in 10 will suffer an illness or injury that puts them out of work for three months or longer at some point during their career
Considering the financial fragility many millennials face, not to mention all that student debt, paycheck protection insurance proves a vital safeguard to their financial health. Spread the word. DIonDEMAND paycheck protection is fast, easy and affordable. Get a paycheck protection quote