How have young people and their financial future been impacted since COVID-19? As a young financial expert and former teacher, the financial wellbeing of young people will always be a passion of mine. Here are the 7 ways that young people and their money have been impacted by COVID-19.
If you bought a 2020 diary, you might now be requesting a refund. COVID-19’s impact has been felt by all generations and young people in particular. Study pathways have been disrupted, exams and schools teaching terms didn’t go to plan, casual hospitality jobs that many students rely on have been furloughed when cafes and restaurants were shut down.
The whole reason I started caring about financial literacy is because as a young teacher in Australian classrooms, I didn’t see it being available to my students. I researched the problem at the University of Melbourne and the University of Cambridge which led me to work on financial literacy at a program level.
How can we expect young people to be informed economic participants if we don’t give them the knowledge and skills needed to do this?
We know that young people don’t currently have equal access to financial literacy across Australia.
We also know that equality of access has never been more important because of the impact of COVID-19 on young people and their money.
For this, I’ll be referencing the Foundation for Young Australians’ Political Attitudes & Covid-19 Survey 2020 prepared with the help of Essential Research, which was released on 30 July 2020. The research focused on the experiences of those aged 18 to 24 and was undertaken from 22 June 2020 to 1 July 2020, so this is recent research of what people are experiencing right now. We’re going to focus on the financial aspects of this research.
Here’s the 7 ways that COVID-19 has impacted young people and their money:
1. A third of young people are accessing government financial support due to COVID-19 impacts
- The Job Seeker and Job Keeper wage subsidy and COVID-19 supplement were set up to help people whose income has been affected by COVID-19, including receiving this payment from their employer.
- Young people are overrepresented in these schemes with over a third of 18-24 year olds receiving payments from one of these schemes.
2. Young people are actively concerned about their financial future
- Young people are more likely than other age demographics to have lost work and the income linked to this.
- Of the 18-24 year olds surveyed, 60% of young people have concerns about being able to find or change jobs and 49% are concerned about being able to pay their bills due to having their work hours reduced or from losing their job.
3. Many have lost the stability of paid work
- Over half of the young people surveyed were not currently in paid employment, with one in four people losing their job since the start of the COVID-19, which is a higher proportion of people than other groups of working age.
- For comparison, 24% of 18-24 year olds lost work due to COVID-19 compared to 14% of those aged 25-64.
4. Young people are changing their financial behaviours due to COVID-19
- In terms of behaviour changes, 66% of young people reported that they were making lifestyle changes to cut back on expenses but these aren’t always good changes.
- For example, 25% avoided medical appointments because they were concerned about paying for medical bills, 23% said they were having difficulty paying household bills and 21% had to move to cheaper accommodation.
- One in five young people are borrowing from their future, with 18% removing money from their superannuation account.
5. Not everyone is confident that they’ll get a job
- Among young people, there is low confidence in the recovery of jobs market from those not in paid employment.
- From those surveyed, only 40% said they would find work quickly after COVID-19 restrictions were eased, with 33% sharing their perception that it would take a long time to secure paid work.
6. Money is one of the biggest concerns for young people
When sharing their concerns for the future, a quarter of young people were most concerned about financial issues, with 21% being concerned about their income or job security.
• And they have reason to be concerned about money, with 46% of young people survey sharing that they would be paying off debt over the next two years or longer.
7. Young people are excited by future career opportunities
- When discussing what they were looking forward to, a quarter of young people were looking forward to starting a role in their career path of choice and 13% were looking forward to completing their studies to get started on this journey.
- If you can offer young people employment opportunities, please do so.
The key takeaway is that young people are concerned about their financial future and have had their income stability affected by COVID-19.
It’s important that we recognise this and provide them with the knowledge they need to meaningfully participate in the economy to maximise their income from the careers they’re excited to commence.
We’re building a coalition of people who believe that young people should have equal access to financial literacy rather than forcing them to pay for the knowledge required to be informed economic participant. We believe that financial literacy should not be down to a parent or postcode lottery – no one is doing this currently. If you agree, please get in contact.
We’re also looking for more young people to contribute to Money Bites and share your experiences of money. Whether it’s books you’ve loved that have helped you with money or what you’ve learned about money, we want to hear from you. If you’re keen to contribute, please get in contact with us. We’d love to hear from you.
Read more: 3 steps to get started with money management