While confidence usually is a good thing, sometimes it can be dangerous — especially when it comes to finances.
The youngest generation in the workforce may be about to learn that the hard way.
New number show Millennials consider themselves far more money savvy when it comes to money than they actually grade out. While nearly seven out of ten Millennials gave themselves high marks when it came to financial know-how, only a quarter showed even basic money management knowledge, according to a new study by the National Endowment for Financial Education and George Washington University.
"As a Millennial myself, I am surrounded by my fellow counterparts - and the financial advisor in me wants to scream," said Kay Pfleghardt, a registered financial associate with Family Wealth & Legacy LLC.She said Millennials often underestimated things such as the burden of student debt and the importance of an emergency fund.
"If the Millennial is successful in building up a solid emergency savings bucket, they will feel a huge sense of accomplishment," she said. "This is especially true for Millennials, as the vast majority of other millennials around them have failed to do this one simple thing."
Pfleghardt said the simplest way to do this is to have one's checks direct deposited into their checking account. Then have their bank set up an automatic transfer to a savings account on the same day that you receive your paycheck.
"The conscious effort of transferring money into an emergency savings fund makes it more unlikely that the individual will be willing to withdraw from the account, or that they will procrastinate about making that deposit into their savings account," she adds.