Young people influenced by parents’ money habits
This is according to a new study published by the Money Advice Service which shows how significantly a young person’s money habits are heavily influenced by their parents’ past and present financial behaviour.
It also confirms the extent to which young people rely on parents for financial advice and help on money matters.
The research asked over a thousand young people aged 15-17 years old about the way they manage their money and their attitudes towards it, including whether or not their family saves money for unexpected costs.
The Service found that the harder the family finds it to cope with saving for emergencies, the less confident the young person is at managing their own money, and less likely to be developing positive money habits.
For example, two thirds (68%) of 15-17 year olds from families who can save for emergencies tend to save money for themselves, but this drops to 47% among young people from families who can’t save for emergency costs.
Similarly, over half (53%) of 15-17 year olds from families who can pay bills or loans find it easy to live within their means, but this figure drops to 29% among young people if their family can’t pay.
When it comes to taking advice on money matters, 15-17 year olds have a clear hierarchy of who they turn to. Over three quarters (77%) of those surveyed said they find their parents’ financial advice most helpful, 17% said financial institutions, 12% friends, and 8% teachers. But most worryingly, 15% said they don’t seek help on money matters from anyone at all.
Commenting on the findings, Caroline Rookes, CEO of the Money Advice Service said: “We know our money habits are formed very young, and once formed extremely difficult to shift. But I am struck by how heavily a young person’s money management habits are influenced by their family’s past and present financial behaviour.
“This is our first glimpse of how these young people are coping with the transition into adulthood – we see a generation ‘coming of age’ through a period of austerity, a group that’s witnessing rapid financial change and learning how to cope and plan.
“It’s vital we keep a track of their habits effectively, so we can better understand their challenges and help them deal with life’s financial ups and downs. The good news is that in many respects, young people are already recognising some important aspects of money management, such as saving for future events.
“But it is clear that there is a huge amount for us, collectively, to continue to do, both with parents and young people themselves, to help them prepare for the financial challenges of adulthood.”