Millennials aren't as smart about money as they think

When you're young, it's easy to think you have it all figured out.

And, in fact, millennials consider themselves far more financially savvy than they actually are, at least according to a recent survey by the National Endowment for Financial Education and George Washington University.

Only 8 percent of those polled had a high level of knowledge, while about a quarter, or 24 percent, demonstrated just a basic understanding of how to manage their money. Yet 69 percent gave themselves high marks for financial know-how. The research was based on data from the 2012 National Financial Capability Study commissioned by the Financial Industry Regulatory Authority's Investor Education Foundation, which asked more than 5,500 young people from ages 23 to 35 basic financial literacy questions.

"This generation is diverse and highly educated. However, their overconfidence puts them in an extremely fragile financial position, and sadly, they don't realize it," Ted Beck, the endowment's president and CEO, said in a statement.

"What young adults don't know about money can hurt them."

For example, only 40 percent of millennials got the following question correct:

Millennials are a generation plagued with record student debt, which has monumental consequences. From buying a car or a home to getting married and even having children, many millennials are putting off life's major milestones because of their outstanding loans, studies have shown.

Two-thirds have at least one source of long-term debt, including a student loan, home mortgage or car loan, and 30 percent have more than one type of outstanding long-term debt. The majority, or 53 percent, said they have too much debt, according to the endowment.

As a result, many do not have the cash on hand to weather sudden economic shocks. When asked if they could come up with $2,000 in case of an emergency, nearly half, or 48 percent, said they probably or definitely could not. Less than one-third, or 32 percent, had three months of household expenses set aside. (Time to start an emergency fund? Here's how.)

Even worse, nearly 30 percent had overdrawn their bank account in the last year and about 20 percent of those with a retirement account either took a loan or made a hardship withdrawal in the past 12 months.

"Young adults may not understand the consequences of their actions, such as how taking money out of their retirement accounts now has an exponentially negative effect on account balances in the future," Beck said.

On the upside, the vast majority had either a checking or savings account, and just over half, or 51 percent, also had a retirement account. Over 40 percent own a home and one-quarter have investments in stocks, bonds or mutual funds, the report said. (Still, some millennials shy away from credit — about 63 percent of younger millennials don't have a single credit card, compared with 35 percent of adults over 30, according to a separate report by Bankrate.)

Only 6 percent said they were are "extremely satisfied" with their current personal financial condition, while 18 percent were "not at all satisfied."

"The financial picture isn't all bad," Beck said. "But it's not where it needs to be."