DOES CAREFREE SPENDING MASK DEEPER CONCERNS? OR ARE YOU JUST CHOOSING TO ENJOY LIFE NOW?
Today’s skint graduates are baffling experts by exhibiting a ‘YOLO’ (you only live once) attitude to money, despite being among the most indebted generation ever and facing sky high rents and house prices. What’s causing this paradox? Do you simply prioritise enjoying life now over worrying about the future?
A new study by insurance firm Aviva is the latest to document the phenomenon. Researchers found that 41% of respondents under 34 years old admit to spending their savings on buying things they want but don’t actually need, such as holidays, festival tickets and nights out. Meanwhile, over half say they ‘treat themselves’ to smaller items ‘as and when’ they want. Another 27% say their spending patterns mean they’re saving nothing at all for the future. A fifth (22%) often use their overdraft and less than that (18%) admit they don’t pay off their credit card debt every month. Yet, despite all this, only a quarter (26%) reported feeling worried when thinking about their finances.
But this carefree spending is only part of a curious mix of of attitudes towards cash. Aviva’s investigation also suggests many young people may be suffering from so-called ‘ostrich syndrome’, knowing something is wrong but sticking their heads in the sand when it comes to money matters. Almost two-thirds (64%) of young people said they did not save as much money as they’d like to, and a third (34%) worry about how much debt they have.
Graduate Fog is keen to explore these contradictions and find out what’s going on. We know from past posts on this website that you hate accepting hand-outs from your parents but we regularly note from below-the-line comments that many skint graduates seem remarkably concerned about your student debt, or about your ability to afford a nice life in the future. Why is that?
* HOW WOULD YOU DESCRIBE YOUR ATTITUDE TO MONEY?
What do you spend your cash on – and are you happy with the way you manage your personal finances? If you’re not worried about money, is that because your friends are all in the same boat? Would it have been helpful to have classes at school about how to manage your money? What do your parents think about your spending habits? Please comment below – we’d love to hear your views and opinions…
Although Aviva face a challenge, not only to sell its financial products to Generation Z, but a more financially savvy generation who have grown up in the knowledge that such products are not worth the paper they are written on…take Pensions (for example), although any Savings Product is non viable given that interest rates are obsessively low.
Rather than address this issue, they suggest that Generation Z have a problem with financial management.
I have £2000 to my name. No debts. No credit cards.
Being on benefits completely wiped a lot of my savings. The job I start on Monday is full time and will bring in £320 a week or thereabouts.
Been thinking about whether I can get a second job of a weekend say in retail. You know the kind of weekend thing that kids doing their A-levels would do. That would bring in another £100 or so.
Working seven days a week probably wouldn’t be healthy but I don’t have anything resembling a social life at the moment.
I recognise the “ostrich syndrome”. A few times when I was on JSA I bought things just to cheer myself up which in retrospect wasn’t all that wise.
I have £16,400. Last year it was £17,500 before I went on holiday.
This is the benefit of living at home long term, but I lack life experience as a result.
First, as I read in the book on the American poor Evicted, if you can only save – or repay debt – only a tiny bit you start to wonder if there’s much point.
If by scrimping, you can save, say, £100 – £200 a month out of c £1000 a month wages, and your rent for a room is, say, £400 – or in London way more – it doesn’t take a genius to realise that even savings for 6 months would disapper on rent very quickly if you lost your job, leaving you back where you started but having had less enjoyable experiences.
From my own experience in the past (debt’s still there but consolidated and more manageable, sort of), once you get into a certain level of commercial debt there’s often a sense of screw it, you may as well enjoy one more little thing, since you can’t afford anything anyway – or, as an extreme, if you’re about to default or go insolvent it really won’t make much different – leading to death by a thousand cuts.
Some of it is also disguised poverty, doing the things your co-workers or friends do, or feel you should be able to do after worker 37.5 hours or more a week.
As for holidays, going to the pub or for meals or other experiences etc instead of saving for a deposit etc. If they can afford a holiday whereas getting a mortgage is nigh impossible for them – as it is for the vast majority of the population in London, for instance – that sounds like an entirely rational decision.
“A fifth (22%) often use their overdraft and less than that (18%) admit they don’t pay off their credit card debt every month.”
It’s not all luxuries and fripperies though. Plenty of people would be homeless without their overdrafts and credit cards, and it’s pretty much impossible for a childless, under 35 year old without savings to avoid severe risk of eviction on benefits without some access to credit given how long they take to arrive, constant suspensions due to changes in circumstances and abysmal under 35 Housing Benefit rates compared to actual local rents etc.
Also, wouldn’t much of the retail sector collapse if too many people lived within their means?
“that many skint graduates seem remarkably concerned about your student debt”
Student Loan Company debt is different from commercial debt. It’s more like a tax, that low paid people don’t even pay.
Though even non-mortgage commercial debt is very normalised now, so many people are in it more or less perpetually.
I am pretty boring and sensible with money and I think it’s just how my parents raised me. It helps that I have enough money to live on, if my parents had forced me to move out while in low paid work in the South East no amount of self-control or arithmetic would have balanced the books.
I wonder if this attitude is more hopelessness rather than recklessness. There are a lot of people who no matter how hard they work or how frugally they live won’t be able to get enough money together for that deposit on a house. Why miss out now when in the long run it makes little difference for the future.
The state rewards those who breed the most by giving them a house and child benefits. This country is backwards.
Hi all,
If you haven’t seen it, we’re having a good discussion today about the reality of being a graduate going back to live with your parents to save money after uni. Swing by and share your views, if you have a minute!
https://graduatefog.co.uk/2016/4660/half-of-new-graduates-still-live-with-parents/