The headlines scream DANGER, but I see an upside.
When you read this headline, you’ll probably nod your head in agreement while simultaneously shaking your head in disapproval…
Financial news about millennials
15 Percent of College Millennials Spend Parents’ Money Primarily on Partying
That’s how a personal loan company called OppLoans titled its latest study, which polled 1,000 millennials “who received recreational funds from their parents while in college.”
As is often true in journalism, the headline doesn’t tell the whole story. You need to keep reading to get the full perspective. In this case, halfway down the story, you learn…
- “67 percent of millennials who receive recreational funding from their parents in college receive $2,000 or less annually.” That’s less than $39 a week, which is still a sum worth saving, but it’s not outrageous, either.
- “Most college millennials use recreational funds from their parents for relatively innocent purchases.” That’s eating out and buying clothes. They’re not buying illicit drugs or even lots of alcohol.
- “Most millennials who receive recreational money from their parents…worked at some point while enrolled in college.” This is as it should be, and it’s good news.
I mention this minor study because it points to a major problem: Financial news is almost always dire if you just read the headlines. Another example…
Financial news about life insurance
AIG Research Shows Americans Without Life Insurance Not Taking Action to Reduce Financial Risks
When you study new research like this, you always consider the source. In this case, AIG calls itself “a leading global insurance organization.” So it makes sense AIG is concerned about Americans not buying enough life insurance.
By polling 8,100 of them between the ages 21 and 64, AIG learned that those without life insurance are “less likely than life insurance owners to increase their rate of retirement savings in response to the risk of a market crash.”
This isn’t surprising. Many Americans who are mired in debt prioritize other expenses than life insurance. As a CPA and financial counselor, I obviously believe in life insurance for parents and many others, but I’m also realistic about the reasons why it’s often passed over.
Yet the AIG research also showed that those without life insurance “are twice as likely to take actions to reduce the financial risk of illness of self than of death.”
This is actually good news. Why? Because it tells me that Americans who don’t have life insurance understand its value, even if they can’t afford it right now.
They’re serious about ensuring they can keep earning money for their family. So yes, while they should prepare for the possibility they could die and leave their family stranded, they’re also practical enough to realize that injury and illness are much more common ways for that same income loss to happen.
Financial news conclusion
This might seem like a minor point to be pleased about, but when you counsel people on their finances, you quickly learn: They justify their debts, and they underestimate their risks. It’s downright impossible to convince some folks to save for a retirement that’s decades away, or to pay off credit card debt that all their friends have worse than they do.
So any acknowledgment of a financial problem makes me happy. Overspending is like any addiction: The first step to recovery is acknowledging the problem. If you only read the headlines of financial stories, you’re not getting the entire picture.