This week, at the Young Money Matters Conference, our eyes were opened to the reality facing young people today. Our twenty somethings are at the start of their careers, but with the worst financial outlook for thirty years.
They know that they want to buy a property, but have little hope of ever being able to afford it. They are frustrated by an ever changing pension scheme and frankly just don’t understand it. They want to save, invest, and engage with their finances, but they don’t know HOW.
This may seem very far away from the lives of our young Osperteers still at school – but it isn’t.
Here is the consensus: the main reasons for young people’s disillusion when it comes to property and pensions are:
1. LACK OF KNOWLEDGE – no one ever told them what a pension scheme is or why they need one.
2. LACK OF SELF BELIEF- too often, young people brush off their poor finances with the excuse ‘I am no good with money’ and ‘I am burdened with huge debt’.
3. LACK OF UNDERSTANDING – the financial jargon surrounding the schemes on offer is too difficult to decode.
4. LACK OF PLANNING – the unstable job market makes it hard to form any kind of financial plan.
So – these are the problems. But what are the answers?
According to the financial experts on the panel, the answer is EDUCATION.
Rohan Sivajoti from Evestor, an online investment business, told the story of a class of 12 to 13 year olds in Fairfax, Virginia. They received 24 hours of financial education over a six week period. At the end of that course, they were given an alter ego with an entire life history and financial identity. They then attended an event, where for one single day, they ran their own life.
These kids have since been proven to achieve greater success after leaving school. They were even able to teach their parents about money management!
The problems affecting young people today are problems that could have been avoided. The moral of the story – start learning now!
So – what do you think? Do these experts know what they are talking about or is it all hot air?