FINRA Study Reveals Millennials Lack in Financial Capabilities

FINRA Study Reveals Millennials Lack in Financial Capabilities

Core Facts

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Americans born between 1978 and 1994 - commonly referred to as Millennials - came of age in an America that is different than it was for previous generations. Millennials grew up in a country characterized by more racial diversity, a narrower gender gap in educational attainment, large increases in the cost of higher education, and the defining events of September 11, 2001. 

In addition, millennials faced the Great Recession early in their lives and/or careers. In its wake, they continue to wrestle with the financial challenges of a struggling post-recession economy. Making up nearly a third of the population, Millennials are a significant force in the U.S. economy.

Given the financial challenges they face, the ability to make well-informed and effective financial choices is important for millennials. A FINRA Investor Education Foundation’s National Financial Capability Study (NFCS) suggests, however, that younger Americans lack the financial knowledge to make well-informed decisions, and that they engage in behaviors that are detrimental to their financial health. 

As an example of how Millennials generally fall behind in this area, they are the most likely generation to have unpaid medical bills and who spend more than their income.  They are unlikely to plan ahead with savings (not entirely unexpected, given their youth) with less than one-third having a rainy day fund, and only about 4 in 10 are saving for retirement, which is significantly lower than all other generations. 

The remedy for these financial behaviors is quite simple: 

1. Savings

If one were to only set aside 10% of all income into an account of some description, this would add up over time and would minimally provide a safety net if it were ever needed. It could also provide the seed money for a more involved investment strategy, like a retirement account, life insurance, etc.

2. Debt

Generally speaking, no one has heard a compelling argument for increasing one’s debt. We all would like to be debt-free, and the way to do that is to pay your credit cards and other debt down, one at a time, while maintaining lowest possible interest rates and contributing more than the minimum on the bill every month. 

3. Investments

“Wall Street” is not some fantastical creature that is too difficult to understand unless you have a degree in economics. With sound advice, and a sensible middle ground investing strategy, it can actually be quite a relatively simple and easy to follow process. 

4. Financial Literacy

Getting a basic education on the ways of money is not difficult nowadays. There are many state and national programs which focus on financial literacy. Or if you’re a do-it-yourself kind of person, there are many available programs online. Investing in your own financial well-being will pay off in dividends, as your increased understanding of the subject will result in better decisions being made, and greater control and responsibility over your financial behaviors. 



Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC


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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website:

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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