Slightly older peers key to financial education

Young people aged 16-21 could benefit from hearing financial mismanagement stories from those in the 22-29 age bracket, a report by the Money Advice Service has suggested.

The money management advisory group conducted research among 16-21 year-olds and the 22-29 age group to understand their attitudes, behaviours and regrets towards money.

The research found several common themes among 16-21 year-olds. They tend to:

  • give little thought to the consequences of their actions
  • have faith that bad financial decisions won't impact them in the future
  • see credit as 'free money' and debt as normal
  • rely on parents to cover the costs of their spending habits
  • have a 'spend today, worry tomorrow' attitude.

However, attitudes changed after hearing about the financial regrets of those of a slightly older age. Many of the 16-21 year-olds realised:

  • they may regret current decisions in the future
  • the potential consequences of financial decisions
  • things may not turn out as they hoped
  • it's better to resolve bad decisions sooner than later.

The Money Advice Service has made a series of recommendations:

  • provide opportunities for 22-29 year-olds to talk with teenagers about their experiences
  • encourage parents to talk openly with their children about money management
  • increase transparency within the financial services sector
  • provide financial education at key points in life, such as when young people first leave home
  • parents should allow children to learn about the consequences of money mismanagement before they leave home.

Caroline Rookes, chief executive of the Money Advice Service, said:

"Young people tend to think parents, teachers and others of an older generation do not understand them and the pressures on their lives, while immediate peers - classmates and others of the same age - are not considered sources of sound advice. Nor do young people necessarily want to talk about their private money issues with their friends and wider social group.

"However, this research shows that hearing those just slightly older than themselves talk about the regrets they have from their own recent experience - while it is fresh in their minds and while, in many cases, they are still living with the consequences - can be a powerful stimulus for young people to think about how they could do better in their own lives."

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