3 ways to improve financial capability among millennials and gen Z

As we reflect on Financial Literacy Month, one of the areas we’re focusing on is our research on the financial knowledge, behaviors, and perspectives of young adults. While we have discovered helpful new insights, we’ve found that deficiencies in the financial capability of first year college students have not changed much, since our last report 2 years ago.

Of the 104,000 incoming college students we surveyed in our Next Generation of Financial Capability Report, there is a general lack of financial knowledge, skills, and plans for the future. They are accruing high levels of student loan and credit card debt, displaying poor understanding of basic financial topics, experiencing financial stress and anxiety, and becoming less proactive in their plans for the future.

There is still a financial literacy gap that we need your help to close. But research continues to help us pinpoint the problems and bring us closer to a solution.


The first year of college can be a time of significant financial distress for students as many take on increased responsibility for their own fiscal decisions through loans, credit cards, and personal finance management. But increased responsibility is not synonymous with increased capability—respondents still displayed a lack of skills, knowledge, and confidence in their abilities to handle their finances. This stress is very much exacerbated when paired with inadequate financial knowledge. When asked about various challenges of college life, students consistently reported feeling least prepared to tackle their finances and were particularly stressed about financing their education and finding a job after graduation.

The good news is the flip side:  As financial knowledge increased, reported stress experienced from financial decision-making decreased. Yet another reason why it’s so critical to young adults’ well-being that they become more educated in this area.


It seems that education is not the only factor driving what a student “knows” about their finances, it also hinges on their personal experiences and perspectives. For instance, direct financial experience with checking accounts was linked to increased fiscal knowledge scores. The students who had more experience, also had greater feelings of self-efficacy and confidence in their abilities.

But as of now, most students’ personal finance experience is quite limited. Only 59% claimed that they had checked their account balances in the past year and even fewer had ever created a budget. This means there is an opportunity to increase students’ financial empowerment and knowledge by providing opportunities for them to experience personal finance management firsthand.


In surveying students across 48 states, the states with the strongest financial literacy policies that were enforced at the district level with required courses being implemented, produced citizens with above-average financial capability. Students of these states (such as Virginia, which implements EVERFI’s financial education statewide) also had notably lower stress levels and felt more prepared to manage their money (60%, compared to the national 33%).

However, as the National Council for Economic Education’s Survey of the States (2018)  notes, there has been little to no increase in such education requirements across the country in the past few years. While financial capability education and personal experience are key components of the development of these traits, state-level policies for fiscal training should also be mandated in the K-12 curriculum with developmentally appropriate and efficacious programs. State-level support is an enormous part of the solution and we must insist on more state advocates like Virginia.


Today’s students are less stressed, more confident, and more financially capable when they (1) receive continuous, developmentally appropriate educational content, plus (2) direct interaction with personal financial resources, and (3) live in a state with strong policies that are enforced in this area. Where we see these approaches combined, is where young adults seemed the most primed for financial success.

We believe by expanding financial education policy and mandating programs across more states, we could very well see meaningful nationwide improvements in financial capability.  While there is still much work to be done, we continue to identify systemic problems and re-prioritize our efforts to do our part in improving the financial well-being of young people across the country.

About the Research

During the Fall 2017 semester, EVERFI researchers collected survey data from a nationally representative sample of incoming college students, totaling over 104,000 respondents from more than 410 institutions in 44 states. Survey questions covered a variety of topic areas relating to financial literacy, which included their experience with checking accounts, student loans, credit cards, budgeting, saving, and planning for the future.  Participants were also asked to answer six basic financial knowledge questions, developed by Annamaria Lusardi, Director of the Global Financial Literacy Excellence Center (GFLEC) referencing topics such as credit history, net worth, interest rates, and student loans. Download the research.

Co-Authored by: Ashley Keating, Digital Marketing Manager at EVERFI

Daniel Zapp

Daniel Zapp

Dan drives the data analysis, research development, and dissemination of findings gleaned from digital education courses concentrated on social and personal wellness. He has extensive experience in research methodology, advanced ... Web: https://everfi.com Details