If there's anything that everyone can agree on is the fact that financial literacy is something they learned after they entered the practical part of their lives like when they got a job, had to pay bills and file taxes. Prior to that, there is no formal education included in the schooling that prepares a person for finance management, the dos and the don'ts.
This results in many people ending up with massive debts from bad mortgage deals, student loans and credit cards with high-interest rates. This is why financial literacy is so very important for you to understand and learn about no matter where you are in life. Finance management can help you set realistic financial goals and help you get a lot of burden off your shoulders just by simply having an idea of how finances work.
However, if you are starting to learn more about finance and probably feel isolated during the process then don't worry there are a lot of people who are in the same boat as you. In fact, the statistics surrounding young people and their financial management are so harrowing it might make you want to enroll in a finance management class when you are done. With that being said, here are some interesting (yet worrisome) facts about finance.
1. Significantly Less Savings
Yes, you'll be shocked to know that 58.1% of millennials have less than $10000 in savings. While millennials are considered to be the young generation but as of now, most of them are in the middle of their career path and if they have less than $10,000 in savings in their banks then they probably don't know how to properly manage their finances.
It's true that inflation has also been damaging but there are a few measures that people can take to ensure their savings like budgeting, mindful spending and taking out at least 20% of their income to save.
2. Lack of Long-term Financial Planning
As surprising as it may sound, only 30% of American households have long-term planning when it comes to financing. This is because there is a lot of uncertainty surrounding finances mainly due to a lack of financial literacy and some people, who are working in lucrative fields feel like they don't need financial planning since they make more than enough. The truth is financial planning is a must whether you are rich or poor, it can save you from a lot of trouble.
3. Recovering From A Setback
These statistics will definitely shock you. Did you know that 39% of US citizens would struggle to cover an unexpected expense of 400$? Let's say your car broke down or you got injured, you go to the hospital or the car mechanic and he hands you a bill of $400. It would totally mess up your monthly expenditure and may even end up affecting it for the next few months. Emergency funds are there for a reason and they are made to help out in situations like these.
We warned you, this is going to be some tough stuff.