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A closer look at young people’s finances

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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.

2023 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 2023; the other two will cover young people’s attitudes to lifestyle, and their attitudes to employment and careers.

Download the 28-page report, 2023 Future Leaders Index, here.

Source:ARACY eBulletin, 8 May 2023.