Lifestyle

Is the 'bank of mum and dad' just a myth?

Despite the stereotypes of young people as a generation focused on spending with no consequences, young people actually see their money decisions (as well as their mistakes) as their responsibility, our research shows.

They aren't reliant on the "bank of mum and dad".

We spoke to 123 Australians aged between 16-26 across a variety of socioeconomic groups. We asked them about their beliefs, perceptions when it comes to finance and how they made, spent and saved money.

Although parents "helping out" was mentioned - whether through direct money allowances or indirect support such as staying at home and paying marginal rent - it was clear young people saw their financial security as their responsibility.

However, many spoke of the desire to help out their families, particularly if their parents were struggling financially themselves.

As a result, some young people chose to forego opportunities such as further study or training in favour of earning money in the present.

This has longer term consequences for their earning power. For example, they may be stuck in occupations characterised by precarious working conditions, low superannuation contributions and limited opportunities for promotion.

Many participants picked up on the gloomy sentiments around their generations' prospects of home ownership, increasing precariousness of the labour market and the inevitability of working into their older age.

Young people faced a range of challenges, including lower wages in line with their age, unpaid overtime, delayed wages as casual part-time workers and exposure to exploitation and the cash economy.

These all could undermine their attempts to save money and control their cash flow.

However, while focused on youthful consumption, many realise the need to balance this with achieving other medium and longer-term objectives - such as buying a car, or home ownership - and were optimistic of their ability to increase their earning power.

Our research also shows our squeamishness at talking about money has significant consequences for young people. The way we undertake financial literacy education often misses the mark.

Why we need to talk about money

In Australia we often think about money-talk as uncomfortable, boastful or even vulgar, even with intimate partners or close friends. Our study suggests this has significant consequences for future generations' financial practices.

Although we may like to think our own positive money practices transmit to our children through a process of osmosis where they automatically model good financial practices, this was not the case for our participants.

Many found it difficult to articulate how their parents had been successful in saving, planning and spending beyond very general impressions.

However, others did describe how witnessing their parents deal with financial struggles influenced their own behaviours, particularly if they had made significant money mistakes.

For these young people, early experiences of their family having no money for food, or memories of the electricity cut off due to late payment of bills influenced them in the long run. They had thought about strategies for budgeting and were clear about prioritising essentials such as rent.

But the cultural hangover of a hesitance to talk about money meant young people rarely reported discussing salaries, savings or longer term financial goals with their friends.

Although they felt pressure to conform or keep up with activities or new products, many were perplexed that friends could afford something and they couldn't, despite perceiving themselves to be in similar financial positions.

This may of course have dangerous consequences in terms of setting expectations about lifestyle or consumption choices that do not correlate with their financial practices.

Turning financial literacy into action

Our research suggests the current focus on financial literacy, which favours intervention and education at the individual level, only partially helps to support young people.

Unlike previous generations, they face a complex terrain of financial decisions around superannuation, predatory lending practices (such as payday loans) and new, poorly regulated financial products on the market.

Among financial literacy initiatives, clear information is needed about the medium to long-term management of investments, the implications of debt and the importance of discussing their money decisions with others.

Most importantly, more needs to be done to ensure systems and practices around spending and financial commitments are accessible and transparent.

This includes making it easy for people to "read the fine print" in agreements, and being clear about the longer-term consequences of financial decisions.

Young people have a clear idea what they want their futures to look like and they know it requires significant financial compromises and sacrifices in the short and medium term. The least we can do is provide enabling structures to support this.

Kathleen Riach is an Associate Professor in Management, Monash University

This article first appeared here at The Conversation

Topics:  buying a car finances home ownership lifestyle renting young people



Science Festival seriously awesome

CALLING everyone who wants to see, hear and be a part of something totally cool: this is where you need to be this March.

Drink where the cool kids do this summer

There are a bunch of new bars open in Brisbane, make sure you're there!

CHECK out these new funky bars.

Discover Brisbane’s laneway gems

Brisbane's laneways will surprise you.

NOT all of Brisbane City is as it seems…

Top five things to experience this summer in Brisbane

Tangalooma is amazing if you're keen for a dive, kayak or swim.

THIS summer get out and explore your capital city.

Don’t go chasing waterfalls…find them on these drives!

The Scenic Rim is just one place nearby that you'll love.

BRISBANE isn’t all bright lights and city slickers.

Your boots are made for walking these tours

Brisbane Greeters tours are a great way to learn the local history of the city.

YOU don’t need a bike or bus for a seriously good tour of Brisbane.

Is Brisbane the new arts and culture capital?

Check out GOMA's latest exhibition - it's all about hair! GOMA 10 Ambassador Patience Hodgson visits Nervescape V 2016 by Icelandic artist Hrafnhildur Arnardóttir (aka Shoplifter), commissioned for ‘Sugar Spin: you, me, art and everything’ at the Gallery of Modern Art, Brisbane. 
Photograph: Natasha Harth, QAGOMA

THE rest of the world should be envious of this line-up!

League legend lends a hand

Tweed MOL president John Strong, John Feeney and treasurer Paul Rimmington enjoy a chat.

"They do some great things in the community”

Surfing legends create waves for the future

Surf pumping at Currumbin Alley, one of the famous breaks that make up part of Gold Coast's surfing reserve.

"Many of the world's best waves are measured by Kirra”

Firies get new right to fight across the border

AGREEMENT: Crew with (centre left to right) NSW Superintendent Greg Lewis, Northern Rivers Zone Duty Commander Gary White and Queensland chief superintendent Brad Commens.

NSW and Queensland firefighters can now battle blazes across border.

Local Partners

MP says Surfside reviewing services but no changes

TWEED MP moves to allay fears important bus routes are slated for the chopping block and says Surfside Buslines is merely undertaking a review of its services.


BIG RIDE: Matt to bring out smiles for Smiddy

LONG WAY ROUND: Matt Muir raises his bike in triumph on his ride last year.

Fundraiser at Yamba Shores Tavern ahead of 800km charity ride

Production company desperately seeks men

Tammy Dundon and Melissa Quirk.

When you see the movie you'll think ours is even better

Sharky and the Caddman share their stories and music

Brian Cadd and Glenn Shorrock will play Twin Towns on Saturday, February 25.

Sometimes the best plans are hatched over a nice bottle of red

MKR rocked by satay sauce cheating scandal

WE ALL know what satay sauce is, right? Alyse and Matt didn't when they served it up on their MKR restaurant. Slammed by everyone, their reaction was gold.

'Nasty' Married At First Sight groom ripped apart on TV

Anthony gets torn down during the Married At First Sight commitment ceremony.

MAFS groom Anthony faces the music after fiery dinner party.

MOVIE REVIEW: Matt Damon's The Great Wall gets lost

Matt Damon fails in a scene from the movie The Great Wall.

Did The Great Wall get lost in translation?

Paul Murray listens to regions

Paul Murray is taking his Sky News show on the road to shine a spotlight on regional Australia.

Radio broadcaster wants viewers to 'turn up and fire up'

Why Hollywood’s siding with Brad Pitt over Angelina Jolie

Jolie may have the kids, but Pitt has custody of Hollywood

Tensions high at pointy end of MKR's round two

Things are really heating up on My Kitchen Rules.

Games are being played around the My Kitchen Rules table

Jungle Jay sent packing from I'm a Celebrity

I'm A Celebrity ... Get Me Out Here! contestant Jay Laga'aia with Keira.

BIG friendly giant Jay Laga'aia has been eliminated from I'm A Celeb

Potential home buyers punished for doing the 'right thing'

Should I go to university or buy a house?

Get Moo-ving to Mooball

The old Pacific Highway and Murwillumbah railway line cut a parrallel path throughThe thriving village of Mooball , looking North East towards Murwillumbah and Mount Warning.

An expansion plan has been approved.

What $11.9m can get you on Coast's most exclusive street

29-31 Wyuna Drive Noosaville Qld 4566

This is what a cool $11.9m can get you

How a first home buyer built house with no deposit

NEARLY THERE: Construction on the first house to home orphans at Umoja began in January.



Photo Contributed

His home will be completed later this year.

Luxurious living in Tweed

1/27 Charles St, Tweed Heads

Check out this week's feature property.

Ready to SELL your property?

Post Your Ad Here!