Scott Pape: No home ownership makes young women anxious
JESS, 26, did well in Year 12 at a private school and graduated with a degree. Five years later she’s tearing up talking to Barefoot Investor about her life being a “disaster”. Why is she miserable?
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The email subject line simply read: “Crisis”.
It was from Jess, a 26-year-old, university-educated Melburnian who wrote that her life was “a disaster”.
Her email was brief, punchy, and melodramatic. Just the way I like ’em.
She also left her mobile number, so I gave her a call … at 8.51pm on a Thursday night.
Barefoot: “It’s Scott Pape, the Barefoot Investor.”
Jess: “No way.”
Barefoot: “Way.”
Jess: “You’re calling about my email?”
Barefoot: “Yes. Apparently your life is a disaster.”
Jess: “Well, that’s how it feels. I’ve got about $6000 in debt across three cards that I can’t ever seem to pay off … and I hate my job.”
I spent the next 15 minutes talking Jess off her $75,000-a- year ledge.
WHY YOUNG WOMEN ARE MISERABLE
SERIOUSLY, if I had a dollar for every broke young woman who emailed me … well, I’d have enough money to pay Jess’s debts off. Yet it turns out that this runs deep.
This week the National Australia Bank (NAB) released its quarterly wellbeing index and, shockingly, it found that young women aged 18 to 29 are the most unhappy people in the country.
To be more accurate, the survey found that young women have the lowest wellbeing score of all the 48 groups surveyed, and that almost 50 per cent of young women reported they suffer from high anxiety.
Anxiety is worrying about stuff that hasn’t happened yet.
And, like Jess, a lot of young women look into their futures and see a lot to be worried about: they’re living through a unique time in Australia’s history where houses are severely unaffordable, debts are at record highs, and they’re getting married later.
Women are biologically inclined to seek out safety and security — eventually most women (but not all) will want to have children.
And that explains why the NAB survey found that one of the biggest positive impacts on overall wellbeing and happiness is having your own home.
And if you can’t see a way of achieving this, it creates a lot of anxiety.
THE TRIANGLE OF HAPPINESS
THE big shift for me happened a few years ago, when I lost my own home.
It was the first time I got it — in my gut — just how important safety and security are to happiness.
Deakin University Emeritus Professor Robert Cummins says the key to wellbeing is what he calls the “golden triangle of happiness”:
You need to have a sense of purpose, you need to have strong personal relationships and you need to have a sense of financial control.
The research clearly states that money doesn’t make you happy, but it also shows that not being in control of your finances will make you very unhappy.
In fact, Professor Cummins and his research team found that financial insecurity produces similar feelings to those of physical torture!
Cummins found that low-income earners who rated themselves at least an 8 out of 10 for being in control of their finances were far happier than those who were earning substantially more but rated themselves as not as in control of their finances.
Read more: Getting a mortgage means being an adult and taking responsibility
RAISING STRONG, FINANCIALLY FEARLESS WOMEN
ON paper Jess looks the goods:
She went to a private school. (“We paid for her to go to a good school … we did our job!” say her parents).
She got good marks in Year 12, went to university and graduated with a degree.
(“She got good marks … we certainly did our job!” says the school).
Yet now, five years later, she’s tearing up talking to a total stranger about how her life is “disaster”.
Here’s the rub: at no stage of her education did anyone teach her how to manage her money, introduce her to the spirit-strengthening power of saving, or sit down and explain just how amazing the opportunities in front of her are.
And that’s why I’m so very, very passionate about shaking up the current schooling system — kicking out the credit card floggers and their “edu-marketing” (Hello Cred!), and bringing honest, empowering financial education to girls (and boys) in our schools.
And I’m going to do it.
You just wait and see.
Tread Your Own Path!
Read more: Sort debts and savings before looking at the housing market
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