Martin Hospach—Getty Images
By Dan Kadlec
March 13, 2014

Every generation has unique challenges. Yet as Millennials come into focus we’re hearing many of the same things about their money acumen as we heard about Gen X and boomers. This new batch of adults, it seems, also sucks at saving and investing.

A new FINRA study declares up front that Millennials “exhibit a number of problematic financial behaviors, display low levels of financial literacy and express concerns about their debt.” Another section concludes: “Younger Americans lack the financial knowledge to make well-informed decisions, and engage in behaviors that are detrimental to their financial health.”

This message gets a little tiresome. Certainly, we’d all be better off knowing more about budgets and compound growth. But we’ve been hearing this stuff since boomers came of age, and a cynic might argue that the financial industry has a lot to gain by sowing seeds of financial unrest. Bombarded by the persistent message that we are too stupid to manage our own financial affairs we dutifully run to the arms of Fidelity and Merrill Lynch, where for a cut of our assets every year for four decades or longer we hope they will steer us to a blissful retirement.

Is it really a shock that more Millennials (31%) than boomers (22%) spend more than they earn? Millennials are just getting started. They make relatively small salaries and have student loans and the costs of setting up their first household. This kind of spending doesn’t mean they suck. It may just mean they have hard-to-avoid bills—and expect to make enough to pay them off.

The same study shows that a higher rate of Millennials (25%) than boomers (13%) embraces prudent investment risk, such as owning stocks. This is as it should be: more young people shouldering risk because they have time to ride out any bumps and ultimately reaping the higher returns.

I’ve written before how Millennials may be better at this money business than we acknowledge. Two in three young employees are committed to or have the ambition to save for retirement, according to Aegon and the Transamerica Center for Retirement Studies. One in four are habitual savers who ‘always make sure’ they are putting something away. Two in five intend to begin saving soon and three in five understand that retirement saving is important—they just don’t have the means yet. As a rule, they are pretty well diversified in their 401(k) plans.

Another reason things may not be so dire is that we tend to learn about personal financial matters as we age and gather more assets, and have greater need to understand how to manage those assets. Based on a five-question quiz, FINRA found that while just 24% of Millennials answered at least four of the questions correctly the figure jumped to 38% for Gen X, 48% for boomers, and 55% for folks older than 67. This suggests that, to a degree, we pick up financial know-how as we need it.

Is there cause for concern? Absolutely. For one thing, even though we learn as we age, the readings for financial adeptness are abysmally low across the board. When only one in four twentysomethings demonstrates basic understanding of inflation, diversification and compound returns, as the FINRA quiz reveals, there’s a problem. Another flashpoint: 43% of Millennials say they have borrowed from a pawnshop or payday lender in the past five years. These are among the least efficient sources of financing.

“Young people who lack the skills to make effective financial decisions will find it harder to become productive and capable citizens,” Richard Cordray, director of the Consumer Financial Protection Bureau, said this week. “They will incur unnecessary debt, miss opportunities to save money, and develop a poor credit history. These problems will block them from opportunities and resources to improve their futures.”

But there is reason for hope. We’ve been hearing about our collective failing financial I.Q. for so long that, as a nation, we’re finally doing something about it. Millennials have been offered and have participated in some kind of formal financial education in greater numbers than any previous generation, FINRA found. They are also the most educated generation in American history, and higher education is closely associated with higher understanding of personal financial matters.

So while no generation is near where it should be, financially speaking, we are moving the right direction—to where we can better fend for ourselves, avoid some of the same old bad money habits and finally try to rewrite the tiresome storyline we’ve been hearing for three generations.

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