What is the issue?
Photographer : Batsignal
More and more young people are living in some sort of debt. This is concerning because debt limits freedom. It causes people to work to pay off their loans instead of being able to use their money to progress in life.
Who does it affect?
Research commissioned by the NSW Office of Fair Trading in 2003 found that the average debt among young people aged 18-24 is nearly $6000. This implies that nearly all young people are affected by debt in some way.
Why is it happening?
Young people are making bad choices and spending money that they don't have! But why?
Society tells young people through a number of different channels that it is important to have certain things. Youths are particularly perceptible to these messages because they are still figuring out their own individual identities. On top of things like fashion and entertainment, big purchases or investments such as cars and University degrees can put a huge dent in your bank balance. Most young people don't have large amounts of cash handy so they rely on loans and credit cards. The resulting debt makes it hard for young people to move out and start their own independent lives. This can be seen in research that shows more young people are living at home for longer than the previous generation.
It has become very easy to acquire loans and credit cards. Nowadays you can apply online or on the phone and receive approval in no more than ten minutes. The idea of buy now, pay later is very tempting and it is easy to overlook the often outrageous interest rates which can mean having to pay up to 200% of your original loan back.
Mobile phones are becoming an increased cause for concern with a new phenomenon called M Commerce meaning people can use their phones to make purchases and be billed later.An example is the craze of buying ringtones or entering competitions by SMS where there are often hidden costs which can quickly get out of hand. I recently entered one of the competitions they had been advertising on tv where you had to answer several multiple answer questions and I ended up losing over $40 to it! Little did I know they were charging me $2 every time I sent and recieved an answer!
How do I know this?
D’Amore, A 2003,'Youth debt', Adjournment speech, NSW Parliament
, 28 October, http://www.parliament.nsw.gov.au/prod/parlment/han...
Gittins, R 2003, 'Howard's university fees don't look so bad', The Age
, 28 May, http://www.theage.com.au/articles/2003/05/27/10538...
Youth Affairs Council of Victoria, Debt sux!
youthcentral.com, Managing money http://www.youthcentral.vic.gov.au/ViewPage.action...