Filene Report Finds Gen Y Struggles with Personal Finances
May 28, 2014
May 28, 2014
Higher education, ambition and optimism — the attributes assigned to “Gen Y” of the Millennial generation — are no guarantees of financial capability, a new research project from the Filene Research Institute finds.
The report, Gen Y Personal Finances; a Crisis of Confidence and Capability, reveals 66% of Americans born between the late 1970s through the mid 1990s, have at least one source of outstanding long-term debt, and 30% have more than one source of long term debt. The bills Gen Y consumers struggle to pay include student loans (40%), auto loans (36%) and mortgages (29%). The report finds 68% of Gen Y consumers have at least one credit card, and one in five of those consumers has four or more cards.
“Credit unions have an opportunity to step in and help,” according to Filene’s blog post on the report. “With tactics that focus on debt management and financial literacy, credit unions can target the most problematic areas for Generation Y.”
While 70% of Millennials taking a Filene survey rated themselves as having “high financial knowledge” only three percent could correctly answer five financial literacy questions about numeracy, inflation, risk diversification, mortgages and bond prices.
The action plan to help Gen Y consumers recommends that credit unions:
- Offer accessible, convenient alternatives to high cost borrowing;
- Provide access to debt and debt management through existing channels including online and mobile banking;
- Appeal to Millennials’ overconfidence by developing intriguing and engaging financial education tools; and,
- Focus those tools on specific products such as mortgages, credit cards and student loans.
Questions about this story? Contact Lynn Heider: 503.350.2225, email@example.com.
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