Millennial Financial Literacy and Fin-tech Use: Millennial financial literacy (or lack thereof)
Many Americans lack personal finance knowledge that enables sound financial decision making, but this reality is more pronounced among Gen Y. Millennials answered 44% of the P-Fin Index questions correctly, on average, compared with 50% among all U.S. adults (Figure 1).
Eleven percent of millennials demonstrated a relatively high level of financial literacy by answering over 75% of the index questions correctly. At the same time, 28% demonstrated very low financial literacy by answering 25% or less correctly. In fact, only 41% of millennials answered over one-half of the index questions correctly, compared with 51% of all U.S. adults (Figure 1).
A notable difference in financial knowledge exists between younger (ages 18 to 27) and older (ages 28 to 37) millennials; so, focusing on Gen Y as a whole provides a distorted understanding of the millennial financial literacy dynamic. In fact, financial literacy among older millennials more closely resembles that among Gen X. Older millennials answered 47% of the P-Fin Index questions correctly, on average, compared with 49% for Gen X and 41% for younger millennials (Figure 2). Analogously, 46% of older millennials and 48% of Gen X answered over one-half of the P-Fin Index questions correctly, while 35% of younger millennials did so (see Appendix Figure A1). The increase in financial knowledge with age is consistent with findings from other surveys and is seen across the entire population. People are confronted with financial decisions through their course of life which contributes to increasing the level of financial literacy.