Why Financial Education is Important for Millennials

Another question on Centsai I found particularly interesting to me was:

Why is financial education important for millennials?

First, in the interest of full disclosure: I am a millennial, square in the middle of the 1980-2000 age group. I additionally think of myself as completely average. My parents were in the best of times extremely middle-class (if not lower-middle-class). I grew up in a very small town and went to an equally small grade and high school where Americana was practically oozing from the FFA classroom and the sheer number of girls taking Home Ec.

Why am I telling you this? Because I think of myself as totally uneducated in terms of finances.

I remember the first time I heard about financial management. I was a teenager, and my aunt would listen to a radio program featuring someone just like Dave Ramsey (or maybe it was Dave Ramsey… I honestly don’t remember). He talked about debt, mortgages, investing, etc.

Did I pay attention? Of course not. As a millennial who took no classes on taxes or interest rates or had parents who had investments and stock holdings, I just thought that stuff never applied to my life or my future.

Oh, how wrong I was.

Talking to my friends in my age group, as well as some of my friends who have kids now in high school, I know that I am not alone in this.

Graduating with Debt

Let’s be honest. Unless you find the exceptional teenager or the richest families, the moment most teenagers are going to first encounter debt in a real and tangible manner is when they sign on the dotted line of their student loan agreement. I remember my own moment quite well. My mom sat there with the papers on the table and said to me, “Michelle, you’re going to owe a lot of money. And it’s not going to go away. It’s only going to get bigger. You have to pay this back. And you need to do it quickly.”

In my naïveté, I thought, I’m going to make $40,000 when I graduate college. I’m going to pay that $25,000 student loan in two years give or take. It’s going to be okay!

It wasn’t okay. As soon as I walked into college, I had credit card offers coming to me daily, and no mom to weed through my mail or warn me not to sign up for that “Exclusive Offer.” I had a real income and loads of reasons to spend without any actual bills to pay off besides my gas and insurance.

Fast-forward four years, I suddenly had $30,000 in debt between student loans and credit cards. I had on one to blame but myself and my lack of education.

I simply didn’t have the teachers there to guide me through it. I didn’t have anyone who could intelligently tell me about what income rates were or how to pay my taxes. I still have no idea about investing (though I dabble with small sums).

Teaching Millennials is Teaching Children

One of my biggest passions in life is now learning as much as I can about personal finance so that I can make sure my daughter enters college prepared for credit card offers, student loan debts, and savings accounts. I want her to know how to purchase stocks or what a CD is. I want her to know more than me.

And as my age group starts having more and more children, we cannot repeat the mistake our parents, teachers, schools made. We must educate ourselves so we can educate them. We must get our financial house in order so that we can give our children the foundation to be better, wise, smarter than we are.

I know that there are other stories out there. There are millennials who know so much and have made so many smart money moves. There are others who have hunkered down and gotten out of debt or paid for homes in cash rather than mortgaging. I am inspired by those individuals. They are what millennials should strive to be.

But when so many of my friends and co-parts stay in the dark, totally unaware of what their high interest credit card is charging them as they pay the minimum or how their student loan is just dragging them further down the hole, financial education isn’t just an option — it’s essential.

12 comments for “Why Financial Education is Important for Millennials

  1. September 26, 2015 at 1:12 pm

    This might be wishful (and naive) thinking, but wouldn’t it be amazing to see personal finance skills 101 being taught in public schools? I’m not sure where that would fit in, but imagine the impact it would have! It’s great you’re already planning to teach your daughter about money.

    • Michelle
      September 29, 2015 at 6:59 am

      I took a Business Math course as a senior slack off class. You’d think they’d talk about these things, but it was more about basic math with percentages and a little bit of stats thrown in. I cannot believe what a huge waste of my time that was when they could be teaching something real and essential.

  2. September 26, 2015 at 5:28 pm

    Agreed. I am a millenial and a teacher, so i am making sure my students and the next generation are receiving an education in personal finance! 🙂

    • Michelle
      September 29, 2015 at 6:58 am

      You go girl! I remember giving financial aid and scholarship workshops when I worked in a high school. So many had no idea what they had to do or what the forms they need to fill actually were. It needs to be addressed.

  3. September 26, 2015 at 8:11 pm

    I could not agree more! I think a big part of the problem is that college was affordable when baby boomers were in school. My parents were able to work part-time during college and pay for their tuition and apartment rent. That’s not possible these days. My parents had no idea how expensive my degree would be or how much the interest would accumulate. I think their understanding of compound interest was just as limited as mine was.

    I also plan to teach my (future) children as much as possible about money and debt. I will not be telling them what my parents told me (that my student loans would be worth it and that I would be able to get a great job as long as I had a degree in ANY subject).

    • Michelle
      September 29, 2015 at 6:57 am

      I didn’t have any family members go to college before me, but the little they knew had nothing to do with student loans (more like the GI Bill). I remember the initial sticker shock my parents faced when they saw how much it was going to cost me. But the only people talking about it were saying it would be okay.

  4. September 28, 2015 at 3:25 am

    I agree with you that he millennials need to get financial education, which most of our schools are missing out. They need this so that they’d have a better future and know how to manage their money wisely–the value money more.

    • Michelle
      September 29, 2015 at 6:56 am

      Yes. I think a ton of parents cannot really express value that well to their children.

  5. September 28, 2015 at 2:40 pm

    Hi Michelle,

    It is downright scary how many people simply know nothing about finances, even after they have incurred massive amounts of debt. The more we can do to raise awareness for millennials, the better.

    • Michelle
      September 29, 2015 at 6:56 am

      I wouldn’t have believed it until I became that person. I just can’t believe I survived up until this point without getting more in trouble.

  6. October 5, 2015 at 6:20 am

    My brother who’s a millennial is really not a saver and bad at managing his money. He just spend his money on whatever he wants without even thinking its worth. I just hope he realize the importance of money and learn financial education at school or from other source of information.

  7. October 17, 2015 at 12:29 am

    It is really alarming that most people are not financially educated, which results to being broke for longer duration of time and people getting lots of loan without considering its effects on their financial status. I think that financial education should be taught at school.

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