A report just released by accountancy firm BDO and The Co-op examines in detail the finances of young people aged 18 to 29, and paints a picture of a cohort of young people who are worried about future debt, future costs of raising children and how they will pay for their education.
2015 Future Leaders
Index: Spending, savings, and debts takes into account the views of more
than 5,000 young people across Australia, and finds that many of them are
actively starting to curb their financial liabilities by using practical
methods such as short-term savings goals and clear budgeting systems, and are
categorised as ‘canny consumers’ who eat in rather than out, shop for specials
and delay upgrading goods such as phones until absolutely necessary.
There is of course a huge differential between those young
people who are earning and able to save, and those who are out of work, and
cannot save. Almost half of young Australians carry a debt, with the average
amount of that debt being around $4,500. Most young people still aspire to own
their own home and, despite the high cost of housing and a ‘clear awareness
they may never own their home outright’, young people are still prepared to
take out mortgages. However, the majority of young people who have bought
houses ‘have turned to parents or others to gain either financial assistance or
guarantor help to enable them to achieve this goal’.
There is an interesting section at the beginning of the
report that places its findings in context. Among the issues affecting young
people’s attitudes to finances are the increasing unemployment rate, the effect
of technology on jobs, rising house prices, the end of the resources boom and
austerity measures from government.
This is a fascinating look at what young people are doing
with their money and where this will place them in the future. It will be of
interest to policymakers at all levels and anyone working in the areas of
budgeting and future forecasts for youth.
This is the first in a series of three ‘White Papers’ with a
financial caste that will be released by BDO and The Co-op during 2015; the
other two will cover young people’s attitudes to lifestyle, and their attitudes
to employment and careers.