1 in 4 Millennials Would Rather Get A Root Canal Than Organize and File Their Taxes
A recent survey by Xero unveiled the state of financial literacy across the country.
The results of an independent survey of 800 small business owners in Canada, found a lack of financial literacy, especially among Millennials. More so, many respondents were overconfident with their level of knowledge.
When asked whether they thought they were financially literate, 62 percent of Millennials said yes. However, when asked a series of financial questions, the average grade they received was 66 percent.
Though there was a large gap between perceived financial knowledge and actual financial knowledge within Millennials, Canada Country Manager of Xero, Faye Pang, says it’s most likely due to the lack of time and experience they’ve had with dealing with their finances.
“You learn it once you make the mistake for the first time,” she says. “So, to me, a lot of the discrepancy between Baby Boomers and Millennials is reps and time.”
Turning to social media
In addition to time and practice, Millennials have the internet on their side for gaining financial knowledge, namely, social media. Through the survey, 40 percent of Millennials said they trusted social media as a source of information versus 17 percent of baby boomers. Of social media forms, YouTube and Podcasts were deemed the most trustworthy, with TikTok being the least.
While there can be useful information online, like with anything else, Pang says to be critical of the sources you seek out and be wary of opinion versus fact. She also highlights that small business owners shouldn’t put the onus on themselves to become financial pros because there are many ways to “do it together” with financial experts instead of trying to do it yourself.
“I would say Millennial business owners are especially susceptible to that hustle and grind, ‘I’m going to do my own thing and bootstrap all of it myself’ mentality,” says Pang. “And our suggestion is you actually don’t need to be a financial expert—keep doing what you love. If you use technology like Xero and partner with advisors like BDO, we think that is the perfect blend of being able to have financial literacy top of mind, without needing to be a financial expert yourself.”
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The future of financial literacy
With small business owners looking towards financial prosperity in a post-COVID-19 world (42 percent of Millennials said being prepared for financial instability was their primary business goal for 2021), Xero and BDO have recently made a three-year agreement to help Canadians build resilience and plan for future success.
Through the agreement, the two companies are will combine Xero technology with BDO advisors to provide small businesses with real-time financial data and insights to help make smarter, data-backed decisions, building on the “do it together” mentality for helping small businesses navigate their finances.
Considering that 24 percent of Millennials (12 percent of Gen X and 7 percent of Boomers) would prefer to get a root canal than organize and file their taxes, it seems like the “do it together” method of dealing with finances will continue to rise.