A majority of millennials treat their retirement accounts like a piggybank.
According to ETrade, more than a third of millennials make withdrawals from their 401(k) plans – and they use the money for a purchase, vacation or other personal expense.
"That's a very high percentage," said Gregg Murset, a certified financial planner and CEO of BusyKid, a savings app for kids and families. These early withdrawals point to an inability to set priorities, he says.
Young workers who do this clearly lack a full understanding of why they're setting that money aside in the first place. Murset says three things are responsible for this gap.
The first is the lack of financial literacy. Only 17 states have a required personal finance course for high school students. This can set kids up for financial problems later in life, including lower credit scores.
Parents and schools blame each other, Murset says. "Parents say the schools should be teaching it," he said. "And the schools say these lessons should be learned at home."
We all make financial decisions all day, every day, according to Murset, making it more important than many school subjects.
Play Video Money lessons
Whether kids should learn about personal finance at school or at home, though, they are the ones who are left clueless about how to manage money.
Kids need to know what you have to do to earn money and, once you get it, what you can do with it.
The "three S's" — saving, spending and sharing — are things adults do every day. "We go to work, we earn money," Murset said. "We save some, we share some with charity and we spend the rest."
Typical Americans spend and share, according to Murset. "Americans are generous people," he said. Americans are also known for enthusiastic spending. But savings always gets short shrift.
Next is the issue of money that's becoming more abstract. Increasingly, fewer people carry cash. "It's getting to be a bigger problem," Murset said. "Money is invisible to kids; to them, it's numbers on a screen."
That disconnect with the value of money can push millennials to make irresponsible financial decisions, such as taking money out of a retirement plan since it doesn't seem as concrete as cash.
Last is millennials' own lack of understanding how investing works.
Play Video How Kevin O'Leary used a glass piggy bank to explain compound interest to his kids
Without some financial education and experience, it's easy to see why someone would tap their 401(k) for some vacation money.
But this is perhaps the biggest misunderstanding. When it comes to saving for retirement, kids who have learned how money grows over time with compound interest will understand that $5,000, for instance, will grow over the decades to a sum far beyond its original amount.
Kids who successfully learn how to manage their money in a balanced way will eventually have the lightbulb moment that comes with saving money: "This small number turns into a big number over time," Murset said.
More from Personal Finance:
Need help with your boss? Try this simple HR secret method
If you spent too much this summer, do these five things to boost your finances
Choosing your first health insurance plan? Here's what you need to know
