Half of under 25s feel their finances are out of control

A new survey of 16-24 year-olds, also found just half received financial education at school.

Nicholas Muscat. Picture: Toby Zerna

One in two young Australians feel financially out of control, a new survey reveals, and under-25s still overwhelmingly seek out their parents for advice on how to ­handle their money rather than go to a bank or expert.

The research by accounting firm Findex, based on a survey of 16-24 year-olds, also found just half received financial education at school.

There was some financial aptitude on building up savings over the medium term, potentially for a big purchase like a car or a holiday, but little understanding of how to manage money day to day.

Just over half said they never or rarely set a budget for themselves, the survey of 270 young people found.

“It’s a shame young people are still reporting that financial education is not featured on the school syllabus,” Findex chief fin­ancial officer Matt Games said.

“A heavy reliance on parents and guardians to educate the next generation on financial literacy is misguided and potentially harmful.”

Nicholas Muscat, 21, started saving at 13; by 19, he had reached his ambition of saving $100,000, two years ahead of schedule.

“Money isn’t everything but it does affect most things in life,” he said. “Money allows you to do what you want in life.”

Mr Muscat was frugal, rarely ate out and bought few clothes. He also took a keen interest in the stockmarket as a teen and built his wealth with an online store selling imported products.

He said his school offered him no education on finances, and he went online for advice rather than consulting his parents. “I learnt early on they didn’t always have the best financial habits,” he said.

“They would often buy new things unnecessarily, throw out items that were still in good condition, or not compare products and services before purchasing to make sure they were getting the best deal.”

Mr Muscat offered his peers some of his own financial advice.

“Start small and start now. It all adds up, everything from saving a little bit to learning the basics of tax and super.”

The study found one in four young Australians don’t know what their employer should be paying them in super, and one in 10 are tipping money into their super balance.

It also found financial literacy levels of young Australians living in rural and regional areas was catching up with those in the city, but certain demographic char­acteristics like being a migrant or the child of a migrant was linked with lower levels of financial literacy.

“Sound financial decision-making is strongly linked with improved financial wellbeing and greater participation in economic life,” Mr Games said.

“Participation in economic life affects quality of life, the opportunities that people can pursue, and their sense of security.”