The youth have never had it so bad, or so it goes. One famous young commentator went so far to describe her ‘dreams’ and ‘childhood’ as ‘stolen,’ snatched by a baby boomer with a good eye and a butterfly net, perhaps? But there’s an element of truth- young people today are confronted with unique issues, from passive-aggressive tweets from the President of the United States for the unluckiest (poor Greta) to legitimate coming-of-age financial conundra that few generations have ever had to navigate. It’s never too early to prepare for financial independence- how can one weather the storm?
For any young person, education is a problem- and the solution. The current system is pathetically inadequate at properly informing its victims of even the most basic principles necessary for pecuniary prosperity. The financial education charity MyBnk stated that 90% of the UK population received no formal education on money management.
Financial literacy programs exist and are widespread in the UK- those who don’t take advantage of them risk finding themselves taken advantage of the Bank of Mummy and Daddy ends the quantitative easing. Only 8% of those polled said that most of their financial knowledge came from the school curriculum: it is the responsibility of young people to seek their own information, on everything from budgeting and debt management to the intricacies of financial products such as mortgages and pensions.
A university education remains one of the most bountiful investments available. But the cohort currently up to bat have been presented with a difficult curveball in the form of growing student debt. College tuition fees have increased five-fold since 1998 accounting for inflation; now, the average university graduate can expect a debt of £25,505. A possible reduction in tuition fees is unlikely, with the recent Conservative victory sending that lamb to the slaughter, a blow at a time in which a degree offers less than ever when it comes to competing in the job market as they become increasingly common among applicants.
The debt problem doesn’t stop at tuition. Be it credit cards, mortgages or student loans, 55% of 18-24-year-olds and 63% of 25-34-year-olds are in debt, owing on average over £8,000. The problem is less a result of spending habits than of affordability. House prices have risen by 160% since 1995; young people’s incomes have grown by 23%- demonstrating the failure of wages to keep up with inflation, with home ownership falling across all income groups, and a study by Sheffield Hallam University finding that a third of landlords are now reluctant to lend to under-35s.
Given this, young people need to be able to secure a stable, well-paying job. Remaining competitive is indispensable to this end. It’s never too early to keep one’s eyes open for work experience- secondary school is the best time to begin. Apprenticeships are an excellent choice for those to whom higher education is not a viable option, guaranteeing them a marketable skill that is likely to be both specialised and in demand, given that only around 70,000 16-17-year-olds began one in 2016/17.
Building a respectable online profile, staying up to date on market trends and becoming adept at leadership and team-management give young people an advantage over those who fail to think ahead. What employers are interested in is a well-developed curriculum vitae of relevant experiences, such as long-term participation in projects or school activities that reflect well on your ability to perform in that particularly work environment. Skills such as programming are invaluable in a world of rapid technological development, allowing workers to adapt as old industries quickly become redundant.
Fewer young people will have surplus income to invest, but those who do still have tough decisions to make. Falling trust in banks, the advent of a cashless society and reduced home ownership will force young people to reconsider their store of value. Potential new paradigms such as cryptocurrency should be considered in this process. Saving money as early as possible is extremely important- compound interest, the universe’s ‘most powerful force’ according to Einstein, allows one to multiply wealth rapidly. Picture a snowball gathering mass as it rolls down a hill- for the average savings account, simply beginning to invest 10 years earlier eventually allows one to reach a greater balance than someone who saves 3 times as much.
Young people need to make smart financial decisions and make use of every avenue available to them. The margin of error is narrow, and no one is telling them what to do- a failure to take advantage of government aid, such as the housing benefit, for example, could potentially result in a Sisyphean burden later on. The uncertainty of Brexit has muddied the waters, but one thing is visible through the swamp: the next generation need to take their bull market by the horns.