Financial Literacy for millennials and their parents

Financial Literacy for millennials and their parents

Financial literacy is the buzz word of the day. We blame the student loan debt problem on it. I have seen some write that the millennials fiscal woes are a direct result of not being financial literate.

Did the parents of the millennials contribute to the Great Recession? This question was posed on the Freakonomics web site.

In many ways my generation contributed to the recession with a serious lack of financial literacy and or lack of questioning when we knew what we got told was wrong. Not every person but many overdid their credit, bought houses they had no business buying, being part of that process as passive or active recipients. Even today we are revisiting many of the same issues that lead to the "Great Recession."

I had a running argument with my dad during the dot.com bubble which burst. I kept say the dotcoms did not produce anything and had no reasonable manner to gain income and were worthless even though the stock market sold these stocks and they went up up and up until the bubble burst.

In 2015 we had the greatest new car sales in history. Not fuel economic cars but big gas guzzlers lead the way. Millennials and their parents both bought up new cars with easy credit in 2015. As a nation we now have debt levels similar to those before the great recession again!.

It is not just the millennials who are having a difficult time with financial literacy/financial responsibility; it is us, the parents also. We were quick to burry our mistakes and point fingers at the millennials.

I read on PBS an interesting article “Why are millennials turning to payday loans and pawn shops?” A recent joint study from PwC and George Washington University found that 42 percent of college-educated millennials (ages 23-35) have tapped short-term financing from pawn shops, payday lenders, tax refund advances or rent-to-own purchases within in the last five years. They blame student loans and indirectly a strong lack of financial literacy for the issue.

Is the real problem that we do not know financial literacy, or is the problem we are not being financial responsible?

Are the millennials problems all tied to student loans? Or is it tied to the student loans and their new car loan, the apartment they can’t really afford, the new IPhone, the new tablet, the new X.

Many feel financial literacy should be offered in college. By the 12^th grade it may be too late to start offering financial literacy. Students are choosing majors and colleges to apply to in the 11-12^th grade. This needs to be a more important part of school before college.

As a parent of a millennial we are not providing the example in being financially responsible millennials need to emulate? We cannot say "do as I say and not as I do" to them.

We have evolved our economy into more of a consumption economy. We have had flat salaries for many years and credit got much easier recently again. Our economy works better when we spend. With salaries flat and opportunities for college graduates not as robust as in the past this has caused some fiscal woes.

Is the cause all financial literacy or is it fiscal responsibility and learning how to wait and save for what we want? We all have wants we want right now. Learning how to take the financial knowledge and turn that into good financial behavior maybe the real problem. The parents of millennials are not presenting good examples in many cases. How can we expect millennials to act any different? As a nation we spent many years lowering our debt(s) since 2008 and now in 2016/2017 we are exactly back to that same debt level.