Gen Y struggles with finances
A white paper commissioned by REST that surveyed 752 Gen Y’ers shows that GenY-youngsters are in debt much earlier than other generations. They also wait longer before acquiring assets.
When we look at some numbers, it is quite remarkable that younger people are in debt: 36% do not have a credit card and 80% claim they lay each month some money aside. At the same time, 32% between 18 and 35 years old still live with their parents, which would make saving money easier for them.
An important cause is the outstanding study debt of 10.000 to 20.000 dollars. For them (40%), it is a real challenge to pay back this amount of money while trying to save or invest for the future.
It’s also important to know that when youngsters save money, it is most of the time meant for short-term projects, such as a vacation or purchasing new gadgets. Although saving up with a long-term attitude, for example retirement savings, would be more advantageous. It is therefore necessary that super funds start looking for creative ways to change Gen y’s perception towards saving money.
It doesn’t come as a surprise that the older Gen Y’ers save the most: 85% of the respondents between 31 and 35 puts some money away for future purposes, for example, 60% of them already have to pay off a mortgage.
Interacting with Gen Y in an accessible and interesting way is fundamental. Teaching young people more about finances via social media might be a step in the right direction. It is the responsibility of industry funds to make sure youngsters make wise decisions when it comes to their financial situation.