In this latest in our series of article about UK people I focus on younger people, typically the 18-30 year olds. Recent figures now estimate that the average level of unsecured debt for this age group is almost ?8000. This is usually accumulated across credit cards, overdrafts and loans. However the picture may not be as bad as you would first assume, because student loans make up almost 50% of this debt. Students in the UK have now accepted that they will build up a level of debt as they progress through the final part of their education, but the concern I have is that many have no real awareness of how high these levels of debt are. A little sound advice on controlling the debt and options they have for repaying should be a pre-requisite before any credit is offered.
For Students though, financial difficulty was the reason that 34% of them quoted would make them consider dropping out of courses.
The average student debt on graduation is now thought to be over ?13,000.
Looking back over the past 4 years the rate of bankruptcy in this age group has grown from 7.9% to 18.7%.
The FSA (Financial Services Authority) recently commissioned a report into the area and found that of all 16-24 year olds, almost 30% said they wouldn't know how to budget their weekly finances. Almost two-thirds of them wouldn't know the organisations they could go to for help if they got into financial difficulties and only half of all 16 year olds had been taught how to manage money. Credit cards are just as much an issue for this age group as for any other, with almost 60% admitting that they go over budget when they use debit or credit cards.
Finally another figure from the Consumer Credit Counselling Service last year ? the level of debt is slightly higher for young males than females, but the females have the higher number of individual debts.
It is very important to notice that the current generation of young people is getting more and more involved into a lot of things which were either nonexistent or possible in the past. Besides the usual late night drive-in movie or mid-afternoon soccer practice, today's technologically savvy youths can write a letter, talk to a friend, listen to a playlist of more than a thousand songs, update a social networking personal page, and send a letter of application to a favored university, all at the same time, and all this while squeezing a stress ball with one hand. It obviously shows that for today's youth, a whole world of opportunities lies within their reach. But with opportunity comes corresponding responsibility. And, more often than not, there is money involved. Now, more than ever, today's generation of ecoboomers needs to know how to manage their personal finances, wisely and responsibly. That responsibility is emphasized even more for those enrolled in a university.
Take the case of an average college student. The day begins at around midnight with either a late night out together with friends with boxes of pizza with a lot of six packs, or a full blown house party with beer kegs and the works. Night wears on, and the next morning reality kicks in with a vengeance. All those wasted money on beef jerky and nacho chips, now nothing but crumbs on the filthy floor. There's laundry to do. Papers to finish. Food that was stocked up for the week is gone from the previous night's party. There's a trip to the nearest store to restock. If there is a car involved, there's gas to think about (since there are practically no convenience store within reasonable distance from a university; for stores within campus, customers pay more than usual for this extra privilege of ?convenience?). There remains the day ahead. There's lunch and dinner. The overdue rates at the video store. That planned movie date the succeeding night. Not to mention the real responsibilities. Payment for rent electricity, heating and water bills? not to mention tuition fees. And nothing but a limp, twisted wad of money intended to last for the rest of the week.
It is but human to succumb to the pressure of spending while there is money to spend it with. Even matured, responsible, emotionally stable adults fall for it, so why should young people be blamed for it? The real problem is the lack of education, both from adults and friends. The spending habits that start early on in life carry through to adulthood. A teenager who spends sixty dollars on a fad shirt now may spend several hundred for another later on in life. These so called little things tend to stack up and become a huge financial crisis. It is better for young people to learn how money does and does not work as soon as they gain their freedom in college, as soon as they get their student driver's license, before they graduate from high school. The earlier, the better! Because in the real world of credit cards and mortgage payments, anyone who does not know how to stretch, squeeze, scrimp and save money for all its worth ends up in financial trouble, to say the least. And it is very disheartening to splurge all day with nothing to answer for it but candy wrappers, pizza boxes, dirty laundry and old magazines. Young people should learn more about taking care of personal finances, while they are still young and ready.
Both Marcus Brooks & Thomas Winn are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Marcus Brooks has sinced written about articles on various topics from Gardening, Build Online Business and Check Credit Rating. Marcus Brooks writes on a variety of personal finance subject areas for the UK provider www.securedloansuk.com. Marcus Brooks's top article generates over 5400 views. to your Favourites.
Thomas Winn has sinced written about articles on various topics from Sales and Negotiation, College Student Loan and Computers and The Internet. Thomas Winn is a freelance writer for many small financial blogs. With years of experience as a financial advisor, Thomas enjoys managing finances. Other than his advice, Thomas recommends a new financial site that provides. Thomas Winn's top article generates over 8100 views. to your Favourites.