Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%
Warning: Late repayment can cause you serious money problems - For help, go to moneyadviceservice.org.uk
This article is not intended to contain information about, or advertise, products offered by us but is intended to contain information, give opinions or discuss generally available products/services.
Author: Internal Customer Services Agent
Generation of savers or spenders?
In our modern day economy many young adults find themselves in a somewhat frustrating position concerning their finances. Those individuals looking to leave home and place a foot on the property ladder are finding the step itself, a little hard to reach. The harsh reality of the situation is that for many young adults they simply do not have the means or the necessary tools at their disposable to make this transition. As such it is becoming increasingly common for young adults to remain in the family home well into their late 20’s. This is not to say the blame lies with current housing prices or schemes available to support first time buys; although some will always argue this where some blame could reside, in fact in all reality it is the individuals themselves which may have inadvertently placed their finances at a disadvantage for this goal.
More so then ever before our economy facilitate the ability to access a vast number of goods and services as and when we please. This is of course thanks to the internet. So true is this fact that many millions of companies exist solely as an online service. Take for example Amazon, one of the largest retailers in the world and not one single shop front to be seen. What the internet has achieved, probably beyond even its own wildest dreams, is a never ending resource for shopping, spending, socialising and every one aspect of everyday life. This means as consumers we have become increasingly hungry for new ways of accessing the goods and services we want and as quickly as possible! The introduction of the Smart Phone means we can access the internet in all its glory 24 hours a day from our beloved mobiles. Whilst it is true to say that a world without the World Wide Web seems completely impossible to ever imagine now, there is an ever increasingly issue that it can bring.
Our younger generations have grown up being able to access anything and everything as and when they want thanks to the internet and as such our ability to maintain sensible spending habits has begun to decrease. The ease of purchase offered by companies operating from the internet means the younger generations have become accustom to making purchases without even having to move; quite literally. Of course this behaviour is not specific to younger generations and can be seen across all age groups but the point is that for the generation in question the ability to effectively save becomes that bit more difficult. In fact I am not suggesting young adults are not able to manage their spending and credit based commitments but instead quite the opposite. Young adults have, generally speaking, only existed in this internet driven world and therefore are perfectly capable of managing their spending online but for the fact something fundamental is now missing. Whereas in years gone by consumer spending habits were completely different and typically a purchase was only made when you had first saved the money, nowadays, there are a vast number of ways of getting round this. The negative consequence of this, plain and simple; young adults struggle to save.
In order to make the successful transition to being on the property ladder savings undoubtedly plays a massive role. The ability to place a respectable deposit on a property will not only lessen the monthly cost of an approved mortgage but also better the individual’s chance of success in the first instance. Of course saving for sizable sums requires adequate planning and long term commitment and this is where many young adults have missed out. It is true to say that whilst living in the family home the general cost of living for a typical young adult will always be considerably lower than any point thereafter. With this in mind it would be fair to say that saving, even of a small amount, adds vast value in later years. Realistically in fact starting to save for the future should start as young as possible. Many young adults begin their employment career around the age of 18 and as such start earning a weekly or monthly wage. From this wage there has to be room for savings if the end goal is to be achieved. Continued saving will help young adults develop a sense of achievement in their later years as well as providing the basis to plan and move towards their future.
The real question here is not whether our younger generations have the intelligence and capability to save but rather whether they have the desire. Whilst the internet remains one of our most wonderful and powerful tools, a fact that cannot be disputed, it is fair to say it has developed a new culture within our modern day society. Whereas in the past saving money ‘for a rainly day’ was simply the ways things are done, nowadays spending in the moment is much more common place. In time then it will be interesting to see just how our younger generations manage their futures whilst living for the present.