Money Management

What Do Millennials Know About Finance?

This past week a new sitcom titled The Great Indoors debuted on CBS. The program starring Joel McHale has been noted for playing upon stereotypes that the those in the Millennial generation are overly sensitive, technology dependent, lazy members of society. But, in order for those jokes to land, the general public needs to already think that those assessments are true of today’s young adults — and it seems that most do. So what could these coddled, unmotivated kids today know about credit and personal finance? Recently Navient conducted their annual Money Under 35 (not to be confused with the Money at 30 column on this site) to find out the good and bad when it comes to Millennials’ finances.

First the bad: according to MarketingCharts around one-third of those aged 22 to 35 didn’t know what their credit scores were. That figure is slightly better than last year when closer to 40% were unsure of their credit standing. Notably the likelihood of a respondent’s knowledge of their credit increased with their level of education, from only 57% among those with a high school education or less up to a whopping 89% among those with advanced degrees knowing their credit scores. 

Education was also a factor in how likely respondents were to have a mortgage. While just under one-third of  Millennials with advanced degrees reported owning a home with a mortgage, only 18% of those without college degrees said the same. As you’d expect, at 35%, older Millennials (31 to 35 years old) were also more likely to have a mortgage than their younger counterparts. In fact only 20% of those ages 25 to 30 reported having mortgages of their own.

What’s interesting is that just because most Millennials don’t have mortgages and a sizeable portion couldn’t tell you their credit scores, financial health among this generation is in strong shape and rising. This year’s study categorized the fiscal standings of 25% of respondents as “excellent” — up five points from a similar survey last year. Meanwhile 60% of subjects fell under the “good” banner, leaving only 15% with “poor” finances (down from 17% in 2015).

Based on the data presented by Navient, perhaps the reputation that’s assigned to Millennials is unfair. After all, how many of us could have called our financial standing “excellent” or even “good” in our 20s and 30s? Additionally, while they may be mocked for their use of technology, the Internet has given many young adults access to a wealth of financial advice that they seem to be taking advantage of (although it sounds that some need to head over to Credit Karma ASAP). Even with the great recession, banking meltdown, and student debt crisis slowing them down, when it comes to personal finance the Millennial generation is doing just fine after all.

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