Some say the younger generations don’t have a firm handle on financial education. How do we address it? That’s a worth-while question, and one with no clear cut answer.
Many millennials grew up in the midst of a financial crisis that hit in ways not seen with previous crises. In an ever-more credit driven market, underemployment and tight credit limit the generation’s options, and yet a majority struggle with even basic forms of financial literacy, such as budgeting. So is there anything that can be done to keep this generation from becoming a lost generation?
Confidence vs. Capability
With a Filene Research Institute study finding that 70% of the millennial generation rates themselves as having high financial knowledge, but only 24% demonstrating what would be considered average understanding of the subject, there’s a clear gap between Gen Y’s perception of their capabilities, and their actual ability to care for themselves. According to a Time report, 61% of 25 to 34 year-olds require family money to make ends meet, and 45% use a credit card for necessities.
Habits such as those generally leave saving for future expense, such as retirement, out of the question. But how do you reach a group so thoroughly sure that they know what they need to know, even as their own practices prove them wrong?
In the simplest terms, we need to create resources that younger generations will actually use to ensure they better comprehend the financial challenges they will face. A surprising few educational institutions, from primary schools to universities, offer any sort of financial education option, and even fewer mandate it.
In fact, only Missouri, Tennessee, Utah, and Virginia require that high school students take a personal finance course to graduate. One option is to prompt greater mandates for this sort of education.
The US Consumer Financial Protection Bureau recommends all states introduce curricula that include introducing key financial concepts as early as kindergarten, requiring a stand-alone personal finance course for graduation from high school, including personal finances on standardized tests, providing hands-on learning opportunities for money management, offering teacher incentives and training to lead such classes, and providing parents with tools to discuss money topics at home.
There has also been a greater push toward technology for better understanding of money management amongst the younger generations.
Multiple financial professionals recommend finding ways to integrate subtle financial education into gamming, while others are taking the more straight-forward approach of creating mobile applications that allow users to frequently interact with their finances, as well as keep track of multiple sources at once, including mobile or virtual wallets and credit cards alongside bank accounts.
Younger entrepreneurs looking to educate their own generation have even taken it upon themselves to start social media campaigns and online video series, hoping to reach their peers where they know they spend the most time.
Time and Experience
Something to remember with this generation is that they’re just starting to come into their own.
It’s natural that a generation whose populous is only now becoming old enough to be able to reasonably buy a home would not know as much about mortgages and the cost of ownership as generations prior.
Growing up in a time when inflation was largely controlled also means that they don’t have the same practical experience with the concept. When it comes to millennials’ financial education, the focus needs to be on the basics – on financial planning and decision-making that will allow them to better plan for their own futures. Only when they have a solid grasp of those concepts will larger-picture financial matters start to be of genuine interest.
Do you need any milk? Well, you may consider booking a flight to Europe. They continent is currently overflowing in milk, which has even become significantly cheaper than water.
But why is this this happening? Has the amount of milk in Europe suddenly surpassed water levels in rivers and lakes?
The oversupply of milk has been triggered by a number of factors. Firstly, China, which is the world’s largest importer of milk- due to limited production coupled with a huge population- has largely reduced its demand for milk. Unfortunately, even after partly losing its biggest market, things are seemingly getting worse for Europe’s milk situation- demand has also gone down in North Africa, the Middle East and Russia.
Russia’s case is particularly a critical blow, considering it previously imported more than 25% of European Union’s butter exports, and close to 33% of cheese exports. This new move has been driven by the country’s new food imports embargo, which seeks to make Russia completely self-sufficient.
The result? Well, milk prices have fallen by 5% across Europe’s retail outlets, including supermarkets. In France and the United Kingdom for instance, a liter of milk would cost you the equivalent of about $1 on supermarket shelves. A liter of mineral water on the other hand, costs about the same in France, and roughly $1.5 in the UK.
With supermarkets acquiring their milk at about 37 cents per liter from wholesalers, the biggest victims of this crisis are farmers. As a result, they have become exceedingly vocal about their disappointment with the current trend, which forces them to sell their milk products at a loss.
All through summer, Belgian and French farmers took their frustration to the streets, throwing milk and fruits as they sought quick resolution of the crisis from their respective governments.
The United Kingdom also saw its fair share of the protests, with farmers clearing milk from store shelves and blocking entrances to stop shoppers from accessing supermarkets. One of the most outstanding protests occurred in Stanford, where more than 70 protestors stormed into a supermarket with 2 cows.
Due to the growing frustration, farmers further took their protests a notch higher and made their way to the EU headquarters in Brussels, Belgium on the 7th of September 2015. After demonstrating for a couple of hours, they engaged the riot police with a combination of fireworks, hay and eggs.
Meanwhile, on the same day, the British Farmers Union met for an emergency summit, where they resolved to continue pressuring supermarkets to increase prices that will mitigate production costs. Their sentiments are being echoed by the European Milk Board, which is also pushing for restoration of production quotas.
Fortunately for farmers, their efforts have paid off. As a measure of providing relief to their dwindling income, the European Union has pledged to provide more about $555 million. CNN Money further reported that France also made plans to support its farmers though for a 600 million Euro package.
As farmers wait for the said plans to roll out, consumers will continue enjoying milk and dairy products at significantly lower prices than they were previously used to.
It is easy to spend without thinking, from an afternoon pick me up latte to an impulse splurge buying a magazine at a grocery store.
In the moment, these little purchases seem like no big deal - they're only a couple dollars, right? However, in the long run, they can end up costing a significant chunk of change.
For that reason, it's important to keep track of your spending habits, both big and small. That way, you can notice trends in your spending, and then figure out ways to cut down costs.
Here's a few easy steps that you can use to record and learn from your spending habits:
Times are hard for everyone these days. However, asking a friend for a few bucks will not suffice the amount of bills that are required to be paid by the end of the month.
People tend to resort to the means of title loan for obtaining quick cash. That, too, is fast becoming a way for lenders to take away whatever little cash the poor might possess.
In fact, there are many other issues with title loans that have come into limelight in the recent past.
Expert researchers say that due to the repossession policy imposed by many lending companies; the subsequent transaction has not only led to people losing their cars, but also their jobs. They tend to lose their transportation.
Other than that, researchers also found a trend of people who are essentially shut out of the traditional banking system due to their credit history switching to borrowing money by virtue of title loans.
The truth is that people fail to understand the fact that title loans guarantee quick cash at the shortest time possible undoubtedly. However, title loans are short – term loans that can only be secured by a vehicle which can be repossessed by the lender. This is where most of the lenders make more money.
Therefore, it is essential to be aware of all the facts and figures that take a round in this field. Immediately file a complaint against the lender who you find misusing your rights. You can lodge a complaint against him with the Financial Protection Bureau.
Research is Important
Frankly speaking, it is important to do your research before you decide to take a title loan. There are numerous companies who make their information available online for the purpose of your knowledge. You can even visit their nearest branch and find out all the nitty-gritty details that need attention.
Through a press release, the American Psychological Association stated that one common stress among all generations is financial concerns. They further revealed that while 85% of millennials cite money and job satiability as significant causes of stress, only 71% of the older generation views these factors as sources of stress.
As a result, millennials seem to have different financial management factors compared to the older generation, as discussed below.
Technology and Online Platforms Are Important Sources Of Advice
In a report titled, Millennials and Wealth Management Trends and Challenges of the New Clientele, Deloitte stated that the past financial crisis and the volatility of the financial markets have made generation Y very cautions and conservative with regard to financial management.
Compared to older generations, this generation ensures that it does adequate research before settling on any financial option.
Millennials heavily rely on technology for financial advice and subsequent decision making. As a matter of fact, the report showed that up to 57% of millennials would trade their bank relationship for better technological solutions- a trend that is not seen with older generations.
Ken is a finance expert with a degree in finance. He loves pizza, especially Chicago deep-dish from Lou Malnati's!