Today, young people are facing unprecedented financial challenges and there is growing concern that without the right support and education to give them much-needed financial confidence, our young people will not be ready to tackle the ever-changing financial world. Here are eight potential challenges and threats...
1. Lack of Knowledge and Confidence to Make Savvy Money Decisions:
One of the best things you could give your children is the knowledge to be empowered to make conscious, savvy financial choices. Schools, colleges and universities do not teach children about financial literacy and now more than ever, parents need to take proactive steps to ensure their children are equipped to make intelligent financial choices in the future.
2. Negative Influences on Social Media:
With an ever-increasing amount of time being spent by young people on social media and staring at screens, it is harder than ever for parents to see who is guiding their child's financial outlook. Parents need to be aware of what influences their children are exposed to and the impact they may be having. Children need good money influencers that encourage sensible financial habits and inspire them to make savvy choices.
3. Unprepared for a Longer Life:
With healthcare advances, today’s newborns can expect to live into their 90s, with many reaching 100 years old. Your children must be equipped with the knowledge and confidence to make intelligent financial decisions in the future to prepare for a longer life.
4. Rising Debt:
Many young people are starting their careers saddled by student debt. They can often turn to quick and easy, but costly, credit cards, bank loans and overdrafts. The result of this can be financially crippling in the long run if they do not understand the pros and cons of different types of debt.
5. Well-Being Concerns:
Studies have found that your financial circumstances can have a massive impact on your mental health. Young people have reported that they experience anxiety or depression due to financial uncertainty. Your child may experience this without the confidence in their own ability to build and grow their wealth.
6. Ever-Evolving Landscape:
The economic, social and political environment is ever-changing and young people will face unprecedented challenges as they manoeuvre through their life. With the right knowledge and skills to make savvy financial choices, your children can adapt to shifts and uncertainties, and become better prepared to recognise and seize opportunities while mitigating risks.
7. Scammers:
The digital age has brought a surge of scams to which young people, in recent years, have increasingly fallen prey. These scams come in various forms, such as phishing emails, fraudulent websites and even fake investment opportunities. Beyond immediate major financial losses, the consequences of falling prey to scams can be long-lasting. It can damage a person's credit history, making it difficult to access financial services in the future. It can also lead to emotional distress and a loss of trust in online platforms and financial institutions. Financial literacy education encourages critical thinking and scepticism, both of which are essential for detecting and avoiding scams.
8. Lost Family Wealth:
Many families lose their wealth by the 2nd or 3rd generation as money can be easily dissipated by future generations if they lack the knowledge and guidance on how to preserve and build wealth. Ensure your children are well-educated on responsible wealth management and equipped to make decisions that will protect not only your legacy but also build upon it for future generations.
If you're concerned about your child's financial future and want to ensure they are best prepared to navigate these unprecedented challenges, I invite you to take a quiz that will help you discover what type of money role model you are for your children and how them with the knowledge and confidence to make well-informed financial decisions.
What kind of money role model are you for your children, teenagers or young adults?
Take the quiz here.
