Almost a third of young Americans "financially precarious"

Millions of young Americans could be risking their ability to become homeowners by not managing their finances well.

A study by Gaurav Sinha, social work graduate at the University of Illinois, found that just 22% of 18-to-24-year-olds were deemed to be financially stable.

Nearly a third of those studied were deemed to be “financially precarious” with poor financial literacy and income stability.

"They lacked access to mainstream financial institutions, they were frequent users of alternative financial services, which tend to charge high interest rates and fees," said Sinha.

Thirty-six percent had suffered a significant and unexpected drop in income in the past 12 months, had no savings with which to pay their living expenses for three months if needed, and said they lacked the resources to come up with $2,000 in the event of an emergency.

Lacking confidence
The study found that even those who were financially stable, lacked confidence in their financial literacy.

"It is concerning that many young people are entering adulthood without adequate financial capabilities to ensure their future well-being and that of their children."

The full study is to be published in the Children and Youth Services Review.