Unfortunately, young people are not as financially literate as they’d like to believe. My generation of Millennials is notorious for thinking we’ve got it all figured out, but according to a recent study on financial literacy, we’re not nearly as clever when it comes to money management as we’d like to believe. Only 8 percent of 5,500 Millennials surveyed demonstrated a high level of knowledge when it comes to managing finances, while less than a quarter had a basic understanding.

So, which concepts are Millennials missing, exactly? What are the things these young people are doing wrong while preparing for the future? I’ve compiled the following list from a number of finance bloggers, many of whom seem to agree on the same topics.

1. No budget

Knowing how to budget is absolutely essential for financial success, and yet it’s rarely taught in schools, or even by parents. As Kamika Smith wrote for Miss Millennialmagazine, “Budgeting allows you to tell your money where to go instead of looking back and wondering where it went.” It helps you to live within your means, while allocating money to other important areas of your life.

2. Living off student debt

You may have to live off student debt to some extent while in school, but the key is not to rack up any more debt than is absolutely necessary. Take only what you need. A loan should cover tuition, textbooks, and (possibly) living costs, but beyond that, it’s better to squeeze in a part-time job to pay for the rest of your lifestyle.

3. Being too optimistic

Millennials are notorious for their high expectations; in some ways, this is endearing, but in other ways it can be shortsighted. Many young people graduate from university, expecting to land a dream job instantly and establish a lifestyle that reflects that, all the while forgetting that it took their parents decades to build their lives up to a comfortable point. Financial stability takes time and patience and persistence.

4. Using credit irresponsibly

Using a credit card requires maturity, as it is an act of creating debt, no matter how ‘normal’ it’s perceived in our society. A credit card can be hugely useful, but you should understand how it works before using one, especially the importance of paying off statements in full every month.

 

Read more: 8 financial mistakes that millennials make : TreeHugger