Young people – prefer to save or borrow?

June 28, 2017 Achieving adulthood is necessarily associated with starting an independent life, which in turn means financial independence. For many young people it still remains in the sphere of dreams, but according to recent research, young people are doing better in the world of finance. Full independence is a challenge – all the more so because the world sets a lot of requirements for Millenials. How are they doing at the beginning of the road to independence? What obstacles are they facing? And are they really insurmountable walls? 

Millennials on junk contracts

Millennials on junk contracts

How do young people fall out on the labor market? Various conclusions can be drawn from the reports. Young people are associated with inefficient but demanding employees. In addition, they are considered variable because they usually do not stay in the workplace for too long. Positions usually take about a year. They have hit opinions – a sense of independence and freedom of action are much more important to them than professional work.

It is no wonder that the prospect of employing young people raises some concerns for employers. They do not place hope for too long a period of cooperation, so the employment conditions they propose are also not binding. Millennials are most often offered the so-called junk contracts.

However, there are studies that show a completely different image of young people. These are people with numerous doubts about their education, its weight and usefulness – over 41% have doubts about preparation for taking up a job. The majority of students are afraid of graduation because they do not know how it will perform on the market [1].

What do young people spend on?

What do young people spend on?

Millennials are a demanding and concrete generation. As Lenders Research emphasizes, young people are definitely less likely to buy something because of convenience – they tend to focus on the value of the thing. By service providers, they are perceived as difficult, picky and delaying customers [2]. Representatives of this age group are willing to wait longer to find a more attractive offer. This is probably due to low financial resources.

Due to limited funds, young people spend most of their money on the most necessary things [3]. And what would they spend the additional PLN 2,000 for? Provident Polska research shows that the dream of the young are their own four wheels or a vacation in a sunny resort. However, the prevailing trend among young people is the ability to save with every purchase – this helps them maintain their financial balance [4].

How to make money Financial success according to young people

How to make money Financial success according to young people

What, according to young people, can be called financial success? According to research carried out by the Satisface research center on behalf of Blue Media, it is clear that saving for young people is the most important – as many as 53% of respondents declared. Apart from having financial resources, the lack of loans and debts is an extremely important and satisfying thing – 50% responded. Less frequent was the high gross salary (46%) and foreign trips (22%). The least number of people emphasized having an expensive car – only 8% of respondents.

Young Poles do not like investing, but saving. Saving for young people is of great importance. They postpone, above all, to secure their future – such an answer was given by as many as 45% of respondents. With this result, the other values ​​fall pale, as only 23% saves for holidays, and 16% for their own homes, goals such as retirement, computer or holidays are rarely indicated, because here the values ​​fluctuate around 3%. So do young Poles wonder how to make money fast? It turns out that saving and avoiding debt is more important for them [5].

BIK, creditworthiness, verification – financial knowledge of young people

BIK, creditworthiness, verification - financial knowledge of young people

BIK, creditworthiness, verification – these are just some of the concepts that young people do not understand. They do not know what banking scoring is and they do not know the principles by which banks operate. As many as 59% of people between 20 and 24 years old admit that they rely mainly on the economic knowledge of their parents and that with their help they make financial decisions [6]. The state of economic awareness of Millenials is not impressive – as reported by PZU, every third young Pole does not have basic knowledge in the field of economy [7]. Lack of financial knowledge is very bad for consumers. Unverified information derived mainly from the media pushes young people to make wrong, ill-considered decisions. The rest of the study indicates that for young people school is not a treasury of financial knowledge. According to them, it does not prepare for economic life as it should. Therefore, there are more and more indications that serious financial education of Poles should start at school.

How do young people deal with loans?

How do young people deal with loans?

The Credit Information Bureau in May this year conducted a survey that helped sketch a portrait of the young borrower. As it turned out, every fifth young person (18.3%) aged 18-24 has a loan. BIK data indicate that the group of 589.4 thous. young borrowers have 1 million active loans for young people, which gives a total debt of PLN 6.81 billion. Young people use different forms of credit, which is caused by their needs and lifestyle. Out of a million serviced loans, almost 70% are consumer loans, 15% credit cards, and 17% personal account limits. Housing loans represent the smallest share in the structure of loans held by young people – they are only 1.4%.

As research by Pamolia and Dur CF show, young people most often take out loans to invest in their personal development. A lot of representatives of the Y generation often borrow for studies, additional faculty, MBA, professional development, language courses, certificates, etc. Banks offer special loans for young people who do not require high creditworthiness from borrowers. However, there will be no control over debtors’ databases, e.g. BIK. However, young people, when starting their adult financial life, don’t have to worry about verification. Millennials value advanced banking technologies and are not afraid to use modern products such as electronic and mobile banking, which certainly facilitate timely repayment of installments and other operations.

Financial support for young people – online loan without verification

Financial support for young people - online loan without verification

However, loans are a very binding solution. Not all young people want to decide to borrow in the banking sector. For those who are afraid of the high importance of bank loans, the online quick loans sector has prepared very good offers. Technological advancement and speed of cash transfer cannot be denied. In addition to online shopping, online loans are a true symbol of modernity. Young loans are very popular among borrowers, mainly due to their innovation and freedom in choosing both the amount of the liability and its repayment date. Young people who opt for an online loan do not have to worry about detailed control in the debtors’ databases, as these are usually online loans without verification. For interested borrowers, payday loans rankings have been prepared for 18 years – thanks to them they will choose the most advantageous online loan offers.

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