Invest
Failure to launch: Young Australians struggle with ‘financial adulting’
Invest
Failure to launch: Young Australians struggle with ‘financial adulting’
Only two-thirds of Australians under the age of 25 believe they are financially responsible with money, while one in 10 Australians doesn’t get their financial act together until the age of 30, new research has shown.
Failure to launch: Young Australians struggle with ‘financial adulting’
Only two-thirds of Australians under the age of 25 believe they are financially responsible with money, while one in 10 Australians doesn’t get their financial act together until the age of 30, new research has shown.
Research conducted by “buy now, pay later” (BNPL) provider OpenPay through a September 2020 survey highlights that the definition of ‘financial adulting’ is, for almost half of Aussies, simply spending less money than you make each month.
According to the survey results, a vast majority of young Australians do not see investing in property, shares or having a home loan as making them financially responsible.
With around two-thirds of people currently feeling like they are responsible with their money, the survey looked to explore what prompts Australians to start taking their budget seriously.
The humdrum of paying for household bills, groceries and car insurance – the realities of adulting – made over two-fifths of respondents start thinking about being more responsible with their finances.
“There’s a steep curve to adulting. It feels like one day like the world is your oyster and the next you’re debating how cost-effective it is to get private health insurance to pay for your new glasses, or coming to terms with an unexpected vet bill for your cavoodle,” said Mr Eidel.
“Part of financial adulting is managing your cash flow, making sure you have enough money at the end of each month to cover your costs, but also being able to afford the things that bring you joy.”
Real-world financial education
While the majority of young Australians believe they are financially savvy, 73 per cent said they did not learn about finances in school.
Without this school education in place, everyone under the age of 54 said they got most of their financial advice from their parents. Yet only two-fifths believe their parents are financial role models, and a third reported that they act differently with their money to their mum or dad.
Some even feel like they don’t have enough financial knowledge to pass onto their kids, with one in 10 saying they would hire an expert to teach their children about money.
“Young Australians face very different career paths and economic challenges than their parents, but they also have different expectations for how they should be able to manage their financial activities. The rise in BNPL services is an example of how younger consumers are changing the market in their demand for autonomous, smarter ways to manage their financial responsibilities,” Mr Eidel concluded.
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