A new report shows widespread misunderstanding about how finance and money, work, so called 'financial illiteracy,' among the national Millennials and the iGen youngster behind them, News Radio 1200 WOAI reports.
Roy Paul of the group 'Cents Ability,' which teaches financial literacy in schools, says not only does that lead to financially irresponsible adults, financial illiteracy is blamed for one of the most pressing problems in our society today, the increasing 'wealth gap' between those with wealth and those without.
"The financial mismanagement of individuals, or lack of management, is what is directly linked to the wealth gap in this country," Paul told News Radio 1200 WOAI reports.
The facts are stunning. More than a quarter of all adults have 'nothing' saved for retirement, and that number balloons to as much as 75% for Latino and African American households.
Paul says parents don't talk to their children at all about money today, and that leads to common misconceptions like one he hears constantly. The study shows 24 percent of millennials 'lack basic financial literacy.'
"There are a lot of people in this country that believe that in order to invest in this country, you have to be a millionaire," he said.
He said financial illiteracy leads to people paying only the minimum monthly on high interest credit cards, and falling victim to payday loans and other high cost schemes that leave them in debt for decades.
Paul and many other educators and economists think financial literacy should be taught as requirement in public schools. Even 83% of students say a course on finance should be part of the high school curriculum. Currently, only a handful of states require even a half semester of financial literacy courses.