Our Gen: Young Aussies spending habits ‘manipulated’ by big banks

YOUNG people are being ruthlessly targeted by the big banks that “manipulate” their spending habits through social media, according to Barefoot Investor Scott Pape. The finance guru says young Aussies need to smarten up to avoid being sucked in.

THE Barefoot Investor has warned young people to wise up with their money as they face “unprecedented” pressure to spend by the big banks.

Scott Pape — one of Australia’s top finance gurus — said children and young people are being ruthlessly targeted by the banks, which use data to “manipulate” their spending habits through social media.

He said the tactic is unlike any other faced by young Australians in the past, and that kids need to smarten up to avoid being sucked in.

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Barefoot Investor Scott Pape. Picture: Jason Edwards

“The big banks are incredibly good at targeting young people. The data they have on them to manipulate their spending and credit decisions is unprecedented,” he said.

“It’s clear financial education in schools hasn’t really improved, so they need to get smart about it.”

Mr Pape said today’s youth are no less financially literate than previous generations.

“The average millennial doesn’t know much about money and that’s normal,” he said.

“The fact is their parents were able to buy a house in Box Hill for about $20, 000 and now that house is worth $700, 000.

“They lived through one of the biggest credit bubbles in history, and didn’t have to be particularly bright with money.

“That’s not going to happen again so young people today have to be smart.

“It’s bloody hard for them to get their first home.”

Big banks use data to manipulate young people’s spending and credit decisions. Picture: Thinkstock

He said “kid-ults” who stay at home with mum and dad to save money for a house deposit rarely get ahead, and actually end up worse off.

“The kids I’ve met who sit at home in their childhood rooms never get around to saving,” said Mr Pape.

“They are a drain on their parents … I don’t believe giving a kid a handout ever helps.”

He said the best thing parents can do is incentive saving.

“Give them a ladder. Tell them if they start working you will give them a bonus 10 per cent or match them dollar-for-dollar,” the guru said.

“They need to get off their a** and work and save.”

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@AneekaSimonis