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They were 18 years old, got a free t-shirt, $5,000 in debt, and a 600 FICO score. Before the Credit CARD Act’s implementation in 2010 made them stop, credit card companies set up tables on college campuses and handed out credit cards along with free t-shirts and coupons for free food to college students. It was like free money to those 18-year-olds because they were blissfully ignorant about how money and finances work. The credit card companies figured that mom and dad would pay the bills to save their children from financial disaster. Sometimes that worked. Other times in landed the kids in financial purgatory.

Times have changed, and credit card companies face many more restrictions on their marketing on college campuses and their ability to take advantage of 18-year-olds’ financial ignorance and inexperience. But Millennials lack of financial understanding is the same as it was when credit card companies were handing out credit cards like candy. The result, reports Bankrate, some 58 percent of young people have been denied at least one kind of credit because of their credit scores. Some 36 percent with annual incomes under $40,000 couldn’t get credit and 22 percent with incomes over $80,000 couldn’t. For Millennials, it was credit cards (36 percent) but 18 percent couldn’t get a car loan They could be denied not just a credit card, a car loan, but a mortgage, or a rental. And they may not understand why.

Today’s young people, the Millennials, technology is second nature because they have used it their entire lives. But a 2018 study from Discover found that only 12 percent of them have what Discover described as “a complete understanding” of what will affect their credit, compared to up to 29 percent of “older generations” who have a “complete understanding.” (That means that almost three-quarters of “older” people still don’t get it about what affects their credit standing. But that’s another story.)

Even so, young people have managed to accumulate debt. An NBC News study found that three of four Millennials owe money. And it gets worse. A quarter of 19 to 34 year olds have more than $30,000 in debt and 11 percent owe more than $100,000. Just 22 percent have no debt at all. That 11 percent owing more than $100,000 accounted for at least 30 percent of the money owed.

Credit card debt is the most prevalent kind, not the highest dollar amount of debt, but the most common with 46 percent owing that. Student loans come in second in prevalence with 36 percent owing those, but of course those come with far higher balances. The average debt of graduating seniors more than doubled since 1996.

Who is it then who is not having financial or credit difficulties and who is? Elevate’s Center for the New Middle Class found out. Most of the financial problems non-prime Millennials have come from a lack of financial education. They define non-prime as those people with FICO scores below 700. Most of them learned about finances from trial and error. Only 49 percent learned anything about that from parents, never seeing how their parents dealt with finances. They were clueless. Conversely, 61 percent of prime Millennials, those with a FICO score over 700, learned about finances from their parents.

What factors could cause them difficulties in everyday living? The Elevate study found that almost six in 10 of them lived paycheck to paycheck, and more often than not 41 percent of them ran out of money every month. Half of them worry about living expenses exceeding their abilities to pay and only 41 percent say they could meet short-term financial goals as opposed to 65 percent of non-prime Millennials. Only half of them have any kind of handle on day-to-day financial matters, while 65 percent of prime Millennials say they are confident they have their goals under control. And the non-prime Millennials are in debt. Two-thirds say they have too much debt, twice as many as the prime Millennials. And they are “more likely to experience unexpected car repairs or non-routine medical expenses,” the study found.

What could they learn that might make life easier? A study by FINRA Foundation, The 2018 National Financial Capability Study, suggested that Millennials’ blissful ignorance encompassed at least four items.

One, taxes. Billy Hensley, president and CEO of the National Endowment for Financial Education, said “taxes are a mystery to most of us.” They may not realize that if you file a simple return, that is, one that has only taxes taken from a paycheck and maybe a little income from stocks, or interest income, it doesn’t cost anything. You don’t even have to file if your income is less than a specific amount. But if you want the taxes withheld from paychecks to be refunded, you have to file. You could get all the money paid in taxes back. But many don’t know that.

Second, of the one-third of adults under the age of 30 who have student loans, more than half of them never tried to figure out what their monthly payments would be before they agreed to the loan, reported a policy brief from the Global Financial Literacy Excellence Center. The result is that they may be paying far more than they could have if they had shopped for a different loan type, say a subsidized government loan.

Third, they don’t know how to build a credit history or what factors affect a FICO score. They don’t realize that even one late payment, that’s one made more than 30 days after the due date, and missed payments will remain on a credit report for seven years. Two missed payment can cause a 60- to 110-point drop in a credit score says Equifax. Those may not just be a late credit card payment but other unpaid bills and rent. Further they don’t know how to, or care to apparently, access the free credit report they are entitled to every year.

Fourth, they not only don’t budget, but they don’t save, either. Jonathan Clarke, associate professor of finance at Georgia Tech’s Scheller College of Business says, “Being able to think through a budget can make all the difference in the world in terms of achieving financial security.” He reminds us of the old adage, “pay yourself first.” Ten percent a paycheck is a terrific place to start by putting that amount into a savings account before it ever gets to the account where it can be spent with a debit card.

Financial knowledge accrues benefits that many people can’t imagine: good credit, more income, financial security, and far less stress. Little has changed over the decades as to the financial illiteracy of young people. But today, unlike say in 1970, the world is far more complicated. Everything is tracked, recorded, and reported. A new more world-wise attitude would serve young people. Figure that those who would take your money, who would lend you money, who would offer unneeded services are not there to benefit you but to benefit themselves. Once people of all ages figure that out, the way to achieve financial security will become obvious.

By Robert L. Cain

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