Are Millennials Financially Literate?
In an article from Yahoo Finance, “New Report Finds Only 16% of Millennials Qualify As ‘Financially Literate’” by Ben Wershkul.
Wershkul states, “The lack of financial literacy intersects directly with the student loan crisis.
Statistics show Americans have $1.6 trillion in outstanding debt, working out to $29,200 per borrower.”
Because of our astronomical debt, millennials need to be the MOST financial literate.
Dr. Andrea Hasler states, “The problem here is that financial literacy is highly linked to money management behavior and saving and planning for retirement”
I know, as a millennial, I struggle with saving ANYTHING!
Hasler created a 3 multiple choice questionnaire to test your financial acumen.
Do you have what it takes to get 100% on it?
Suppose you had $100 in a savings account, and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
Answers: a) More than $102 b) Exactly $10 c) Less than $102
2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?
Answers: a) More than today b) Exactly the same c) Less than today
3. Please tell me whether this statement is true or false. “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”
Answers a) True b) False
But don’t feel too bad if you didn’t hit them all, Baby Boomers only got 49% right.
(The answers were “a”; “c”; and “b.”)
