The Financial Capability of Young Adults - A Generational View

This paper presents an analysis of the state of millennials in the United States with regard to their ability in handling finances. The paper takes into consideration data from the 2012 National Financial Capability Study which used a sample of 25,509 adults age 18 and older to conduct a state-by-state survey. It provides an analysis of financial capability, financial literacy and satisfaction by generation. In addition, it studies the differences among millennials' demographic subgroups such as race, gender, marital status, household income and dependent status. The paper makes the following observations:

• Millennials are struggling financially. They exhibit a number of problematic financial behaviors, display low levels of financial literacy, and express concerns about their debt;
• Within the millennial generation, females and minorities display signs of lower financial capability relative to males and whites, but it is millennial households with dependents that struggle the most;
• Despite the higher financial strain that millennials face, they express levels of financial satisfaction that are on par with gen Xers and boomers, but significantly lower than the silent generation.