FORT WORTH, Texas--(BUSINESS WIRE)--Despite nearly equal efforts to manage their finances versus their prime counterparts, non-prime Millennials are more likely to struggle financially, according to the second in a series of four Millennial-focused reports by Elevate’s Center for the New Middle Class, released today at CFSI’s EMERGE Financial Health Forum.
According to the research, 44 percent of non-prime Millennials conducted personal research about how to manage their own finances, compared with 47 percent of prime Millennials. Despite these nearly equal efforts, non-prime Millennials – those with credit scores below 700 – are twice as likely to experience significant stress due to their finances and are about half as likely to feel satisfied with their financial situations.
“This study underscores a trend we’ve seen in previous research: non-prime people struggle with their finances because of factors outside of their control, despite an equal desire and effort to make progress,” said Jonathan Walker, executive director of Elevate’s Center for the New Middle Class. “While generally accepted narratives say otherwise, our research shows that non-prime Americans are doing their part to get financially literate, but they are still facing challenges.”
The root of these challenges may come from how non-prime Millennials were taught about personal finance early in their lives. The study also found that non-prime Millennials:
- Didn’t benefit as widely as their prime counterparts from seeing how their parents managed their finances, with only 49 percent stating they learned from their parents’ example, as opposed to 61 percent for primes
- Were less likely to be actively taught financial management skills from their parents, with 1 in 5 receiving this parental education, compared to one in three of their prime counterparts who received instruction at home
- Are more likely to learn financial skills via trial and error (72 percent, compared with 41 percent of prime), which may explain how some Millennials became non-prime – learning by trial and error means non-prime Millennials likely made more mistakes that damaged their credit, as opposed to prime Millennials who may have avoided those mistakes altogether
“Financial education, beginning at home, can play a long-term role in achieving life-long financial health,” said Walker. “We hope that this research will serve as the basis for future advocacy on behalf of non-prime Americans by educators, policy-makers and the public at large. We need to maintain an open dialogue about these issues, which is why forums like CFSI’s EMERGE Financial Health Forum present such important opportunities to come together as a community and devise solutions for these problems. More than half of Americans are now non-prime – the need has never been greater.”
Walker will engage in open dialogue with a panel of non-prime Americans during EMERGE’s Industry Innovation Lunch titled, “Innovation Starts with the Customer: Hear Directly from Non-prime Consumers,” on Thursday, June 15. Non-prime consumers will speak to their experience being non-prime and some of the common misconceptions and challenges that everyday Americans without prime credit face.
The remaining studies in the Center’s Millennial series are:
- Millennials’ Day-to-Day Finances: The Non-Prime Experience
- Getting By: How Non-Prime Millennials Overcome Financial Challenges
For more information on the Center, visit www.newmiddleclass.org
About the Research
The Center’s research compared the responses of 1,217 Americans with prime and non-prime credit scores using interviews conducted December 6-14, 2016. For more details on the study, click here.
About Elevate’s Center for the New Middle Class
Elevate’s Center for the New Middle Class conducts research, engages in dialogue, and builds cooperation to generate understanding of the behaviors, attitudes, and challenges of America’s growing “New Middle Class.” For more information, visit: http://www.newmiddleclass.org
Elevate (NYSE: ELVT) has originated $4 billion in credit to more than 1.6 million non-prime consumers to date. Its responsible, tech-enabled online credit solutions provide immediate relief to customers today and help them build a brighter financial future. The company is committed to rewarding borrowers’ good financial behavior with features like interest rates that can go down over time, free financial training and free credit monitoring. Elevate’s suite of groundbreaking credit products includes RISE, Elastic and Sunny. For more information, please visit http://www.elevate.com.