Young adults tend to carry credit card balances, fret about repaying student loans and don’t have an emergency fund
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Only about 1 in 4 of those in the 23-35 age bracket exhibited a grasp of basic financial literacy concepts. About half reported one or more of the following challenges:
- 53 percent carried a credit card balance at least once in the past year.
- 48 percent believe that if confronted with an unexpected $2,000 expense in the coming month, they would not be able to cover the cost.
- 54 percent are concerned they’ll be unable to repay their student loan. Even among those in households with an annual income of $75,000 or more, a third (34 percent) expressed concern.
Other financial risk factors were also exposed by the survey. For instance, 42 percent of respondents had used a pawnshop, payday loan or other alternative financial service in the past five years. Although the proportion was highest for those with just a high school education (50 percent), almost 1 in 3 college graduates (28 percent) also reported tapping these sources.
Meanwhile, 29 percent of respondents indicated they are overdrawing their checking account, and almost two thirds have not begun saving for retirement. For those who have established a retirement account, 22 percent either borrowed against or withdrew funds from their accounts in the past year.
Released in January 2016, the PwC-funded Millennials & Financial Literacy study was conducted by the Global Financial Literacy Excellence Center at George Washington University, with data collected in 2012 from more than 5,500 respondents aged 23 to 35.
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