Millennials are more educated than previous generations, but they are significantly financially worse off. According to a new report:
“since 1996, the net worth of consumers under the age of 35 had fallen by 34 percent.”
So what makes today’s consumers different? These are a few notable differences, according to the report:
Consumers have less time.
76 percent of respondents reported having less or the same amount of free time than just a year before.
Consumers look to value, product, and convenience.
Consumers across all age groups and income levels value price, convenience and products over core values and personalization.
There’s a big increase in non-discretionary expenditure.
Most notably, the cost of education has increased by 65 percent, a much higher rate than transportation, housing, healthcare and food.
In addition to the various changes in consumer behavior, Americans today are generally unfamiliar with the basics of financial planning like saving, budgeting, retirement planning, investing, insurance and getting out of debt. According to a recent study:
“undergraduate students in the U.S. demonstrated low levels of financial literacy.”
Only 28% of respondents were able to answer simple multiple-choice questions about inflation, interest and risk diversification.
The mind-boggling $1.5 trillion student loan debt, owned by 43 million individuals, even has the Government so concerned, they suggested that colleges provide mandatory financial literacy courses.
A new report from the U.S. Financial Literacy and Education Commission stated that “helping students and their families avoid the pitfalls associated with financing higher education, and empowering them to make optimal financial choices, should be a priority of all institutions of higher education.”
Financial literacy, which is defined as being educated about money and finance, is important for a few reasons:
Money isn’t everything, but understanding how to manage money effectively is probably one of the best skills we have in adulthood.
The ability to plan for retirement or for an unforeseen, life-altering event is critical. With longer life spans and less government aid, having savings has never been more important.
College debt, credit card debt, auto and home debt — American consumers are knee-deep in debt. Understanding loans and interest rates, as well as being able to distinguish between good debt and bad debt can help consumers stay out of financially crippling situations.
Financial literacy for all is an important component of Billshark’s mission. We believe it should start early to ensure that students learn enough to have a successful future as adults. Billshark teamed up with Ramsey Solutions to offer the One BILL, One CHILD program. This curriculum seeks to empower middle school kids by giving them the knowledge they need to become independent, financially secure adults. For every bill we negotiate, Billshark donates one hour of financial literacy instruction to one child.
When we negotiate your bills, we not only lower your monthly costs — we pay it forward by empowering the next generation to live smart money values and become successful adults.