Investment and retirement accounts are not enough anymore -- and the earlier people learn this, the better off they are, according to a recent report.

(Bloomberg Business) — Learning the basics of personal finance are not enough to secure your financial future, a new study shows. Instead, get a savings account, fast.

Millennials who had experience with savings accounts are more likely than people with just a financial education to have money at the ready for emergency expenses, and were less likely to rely on high-cost loans or have excessive debt, new research from the University of Kansas shows. The findings suggest parents could spend more time encouraging their children to use financial concepts in practice, not just learn them, says Terri Friedline, one of the report’s authors. 

“The opportunity to put your knowledge into practice by having a financial product may help to move the needle in terms of financial outcomes,” Friedline says, adding that research suggests kids as young as five years olds can start learning about savings. “They can learn and grasp financial concepts.” 

For the analysis, researchers looked at how nearly 7,000 people aged 18-34 responded to a set of financial questions in a 2012 Financial Industry Regulatory Authority survey. The researchers categorized people based on whether took personal finance classes in college, high school or at work; and whether they lived in households with a savings account. They also controlled for a range of factors that might make someone more or less prone to financial problems, like income, education level and employment status. 

People with a savings account and financial education were significantly more likely to have $2,000 set aside for emergencies than people who only had a financial education. Having both an education and practical saving experience also made young people less prone to taking out risky debt like payday loans. Just 41 percent of people with both an education and a savings account used these “alternative financial services,” which are known for leaving consumers buried in mounds of intractable debt. Over half of people who just had a financial education used those services.

Indeed, people with savings accounts, who took finance classes were significantly less likely to say they carried too much debt than those with just an education.  

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