Building Financial Literacy for Millennials

Building a program in financial literacy for millennials requires a deep understanding of the particular quirks and needs of the specific audience. On this page, we categorize the features of an adult’s financial situation and describe their unique goals, around which adult financial education programs should be centered.

Unique Considerations Regarding Financial Literacy Among Millennials

If you’re working toward developing a program to address financial literacy among millennials, the most important facet of your design should be aligning the programming with their financial situations and urgent needs. Three key areas to address include recovery, foundation-building, and growth potential.

Recovery

Although many possibilities exist for making financial mistakes, there tends to be a common set of difficulties into which many millennial-age adults fall. Following is a list of these common pitfalls:

  • No clear definition of how much money they need for their desired lifestyle
  • No trustworthy financial advisors
  • Lack of financial knowledge
  • Getting advice from the wrong sources
  • A history of problems that combine for a snowball effect
  • Unrealistic ROI expectations
  • Poor financial habits that develop early in life

Foundation

For adults who fall in the Millennial age range, the first step is building a financial foundation. Be sure to include this fundamental piece in your personal finance class for Millennial adults.

Growth

Once a solid foundation is in place, they can focus on future goals to grow their skills and wealth.

Critical Financial Literacy for Millennials Proposal

To Millennials Financial Literacy Means Something Different than it Does to Younger Groups

Adults have needs related to money management knowledge that set them apart from younger audiences. For example, millennials come from a variety of socioeconomic situations and backgrounds which, over time, have contributed to their current levels of financial capability. So when teaching millennials financial literacy, you need to consider the individual demands of their life stage. The Global Financial Literacy Excellence Center has an interesting take on Millennial financial education from a global perspective.

Teaching financial responsibility to millennial adults needs a specific focus. The essential points to know about this unique audience is their current willingness to make positive change in their money habits. Using the Transtheoretical Model of Behavior Change (Prochaska & Clemente, 1982) as a guideline, the NFEC suggests learning which of the following stages of change most closely describes your Millennial personal finance group:

  • Precontemplation: no intent to take action, don’t know their behavior is a problem. Building their long-term awareness can push them forward.
  • Contemplation: beginning to recognize that their behavior is problematic; have begun to examine the pros and cons of continuing down their current path.
  • Preparation: intentions to act have begun to form; they need direction and confidence-building at this stage.
  • Action: have made some modifications to their behaviors and need their efforts reinforced through ongoing training and support.
  • Maintenance: have changed their behaviors for the better and have a plan to keep their positive habits in place.

Concepts for Financial Literacy for Millennials Assets