Empowering the younger generation to manage their money intelligently needs to be a national priority, according to national IFA Continuum.
The hustle-culture youth of today are facing an ever-present temptation to spend with the instant gratification seen every day on their social media.
Never before in history have young people witnessed their contemporaries earning so much money. The dream of a stable 9-to-5 has been replaced by the ever-on ‘hustle’ culture.
For the first time ever, young people are economically liberated, engaged and have the cultural and creative skills to create their own wealth right now, and they are doing it.
However, at the same time, very few are receiving even a basic education in managing finances.
Richard Watkins, Chartered Financial Planner at Continuum, said: “Good money habits are not easy to get into and, in the digital age, the younger generation can quickly get themselves into situations that can have a very damaging impact on their future plans.
“To temper the desire to flash the cash, what young people need is guidance from trusted advisers who are more nuanced and experienced. They need people who can assist them in making informed decisions about money and help avoid getting into bad habits, not to mention the industrial level of scamming present online today.
“Be open and supportive, lean into their skills, and accept you may not know it all, and you might be able to build a stable, comfortable future for them together.”
Continuum has put together some tips to help parents and other advisers guide conversations about managing money with the younger generation.
How can we help the younger generation make wise choices with their money?
• Start with the basics. Explain and show how the banking system works.
• Explain and show how to prepare an income and expenditure statement together with a cash flow forecast.
• And then show how it helps inform better decision making about money.
• Many financial institutions provide good budgeting and cash flow apps for young people. Some will provide pre-paid cards with spending limits and controls that parents can assist with.
• Where a surplus is being created explain and show how that can be accumulated as a buffer and, in time, become a nest egg for the future.
• Talk to them about timing. For example, don’t make important money decisions when you are under pressure, have looming deadlines to meet, or are unwell.
• Pressure to flash the cash is all around – from Instagram dream holidays to unrealistic TikTok trends – so try and get them to think of their future self and what their future life may look like. Might you be in a committed relationship, have a family? What does success look like? Impossible questions for a teenager but it might just make them pause for thought.
• Turn to a professional financial adviser for help.
