The financial management of young people is very important. The modern world offers a lot of new ways to spend money which didn’t even exist before. Because of this spending money by young people and things linked to it are on a shaky base. Concreteness in the use of money has deteriorated as the use of money has become electronic. For this reason, the relationship with money is distorted and young people may not feel like he or her is giving up anything and still receives concrete products.
In our project which is about sustainable financial management for young people, we have researched different kinds of tools for your financial management and tried to look for cons and pros.
I made a survey for my project members to tell about their financial management and received interesting data. According to my survey which i held for my team, my project members have been able to manage their finances better than me. According to the survey they’re pleased with their own financial management. They have been able to prepare for the future and start saving money from a young age. Me on the other hand haven’t been so good with my finances. When i received my first credit card i spent money on really stupid things. Only after i had to earn my own money i realized the importance of using money wisely and the importance of saving.
Some young people don’t have knowledge of simple things such as interest rates and their own monthly expenses. This may lead into taking risky loans with high interest. These kind of loans are marketed as easy money and often lead to financial problems.
Most young people aren’t affected by financial problems though. Big portion of young people have their personal finances in a good shape. They also have long term plans in order. Some young people live in the moment without thinking about the long term effects of their spending and consumption. Nowadays saving, investing and respectively spending money has been made easier trough electrification.
Oour teams favourite way of saving was clearly a housing savings account. Next in the line were regular saving accounts and different funds. I have invested in funds which are relatively safe and are able to atleast cover inflation. Based on the responses my team members are able to plan theur finances in the long run. For example making a budget for the year and monitoring their spending from their banks application.
The most challenging part in their lives has been between the ages of 20 and 25. Transition phase from their parents house to their own apartment and increase in expenditure is a difficult period. When moving to their own apartment you have to pay for living expenses and think about where to put the excess money after paying for necessities. Some people aren’t that good at the assesment of own expenditure so they might get in trouble with their finances.
There is a need for teaching financial management among young people, but the working time of teachers to prepare a course, for example, is really short. In our project, we have gone trough various tools related to improving the financial management of young people. For example, these tools and ready-made materials could easily be utilized in teaching.
We agree with the team members that the school has not gone trough enough things related to personal finances. The school’s teaching focused more on macroeconomics. Instead of school, we have received the most guidance on saving, financial management and investing from friends, parents and finding our for ourselves. The school’s involvement in teaching personal financial management hasn’t been that big. There are a wide range of services and tools available to young people from which to learn about their own financial management, and these services should be brought to the attention of young people.