Research shows the need for more financial knowledge: almost half of young people worry about money
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Febelfin launches campaign and uses influencers to break the taboo around talking about money
Young people struggle with money worries: they lose sleep over their financial situation, are regularly afraid that their bank card will be refused and are worried about having enough money to feed their children. This is evident from a study that Indiville, commissioned by Febelfin, conducted before the outbreak of the corona crisis among 2000 young people between the ages of 15 and 30.
16% of young people never worry about a lack of money. The nature of the money worries is also strongly age-related. 15 to 19 year olds are mainly concerned about having enough money for new clothes (34%), for hobbies (33%) and for parties (28%). Among 20 to 30-year-olds, the biggest financial worries relate to being able to pay the rent or installments for a house/apartment (36%) and being able to save enough (35%). Those who are not studying and still live at home are mainly concerned about being able to pay off a car (33%) and other costs (24%).
Financial knowledge is key
Young people know little about their money matters. Only 27% give themselves a high score when it comes to financial literacy (8, 9 or 10/10). At 24%, that is a downright bad score, ranging from 0 to 5/10. Young people know little about borrowing, insurance, pension savings and taxes in particular. 47% of them also do not know how to manage budgets and 74% do not know that banks convert savings into loans.
This lack of financial knowledge goes hand in hand with a low level of financial involvement (*financial involvement is the extent to which young people are well informed about their finances). This is only the case for 42%. Particularly among those who have financial problems, involvement drops to an all-time low (31%). Those who do not have financial problems are more involved (51%).
In the same line: 47% of young people hate being busy with their money matters. For those who do not have financial problems, this is only 37%, but this rises to 59% for young people with financial concerns.
There appears to be a strong correlation between financial knowledge, involvement and money problems: those who are less well informed about their financial affairs are less likely to deal with money issues and more often have money problems. In this way a vicious circle is created.
Financial knowledge is therefore crucial. A young person who is well informed about his or her money matters and who feels involved will have fewer money worries and will feel happier.
Who can young people turn to?
Young people mainly learn how to deal with money and banking matters at home (84%). The school and friends appear to play a lesser role at 38% and 42% respectively. 70% of young people therefore initially go to their parents when they have questions about money. For 15 to 19-year-olds, this even rises to 80%. The bank comes into the picture for the over-20s.
However, many parents do not like to talk about money with their children. Saying how much you earn, how much you spend and how much is in your savings account still seems taboo in 2020. Parents indicate that they would rather talk to their children about sex than about money. This makes it difficult for young people to learn how to deal with money and build up financial knowledge.
The biggest taboo in 2020 is not sex, but money.
The situation is even more difficult for young people without parents and/or role models. For example, Amber says that at the age of 19 she was suddenly completely alone financially. Through trial and error, Amber learned that as a teenager you actually know almost nothing about money, but that you do bear full responsibility for it.
“At school you learn nothing or very little about money, banking and insurance matters. It is therefore quite normal if you do not know or do not understand something. I was lucky enough to have a lot of help from my grandfather and from a relative who is a notary. You really shouldn't be ashamed to ask for help from people close to you or from professionals. Try to ask questions until you understand how something works. ”
The role of education
In her testimony, Amber touches on an important subject: not only parents, but also the school must play a role in imparting financial knowledge and relieving money worries.
On the one hand, school is the ideal environment for providing young people with reliable information about money. On the other hand, education can remove some of the inequality. By incorporating financial education into the training process, young people start building up financial knowledge at the same time.
Febelfin emphasizes the importance and requests that financial education be included as broadly as possible in the attainment targets of secondary education.
If financial education is the common thread through a young person's school career, the gap in terms of financial literacy and, for example, debt burden can only be reduced. We are therefore happy to reach out to the various education umbrella organizations and all relevant stakeholders to discuss how best to approach this.
Be smart with your money
In the campaign, Febelfin always refers to the newly established platform www.mijngeldenik.be. Young people can find all kinds of information about money matters there. How do I avoid overspending? How do I fill in my first tax letter? Do I need a permanent job to be able to borrow? And what do I have to arrange when I turn 18?
