The rise of cryptocurrency trading platforms and ‘buy now, pay later’ finance schemes have compounded financial stress for young Australians, according to a new report from Monash University.
More than 500 Australians aged 18-24 participated in a survey last year assessing the state of the nation’s youth, including their finances.
- 18% of respondents said they never experienced financial difficulties in the last two years.
- 25% experienced financial difficulties often or very often in the last two years.
- 53% used ‘buy now, pay later’ services. 78% of First Nations respondents used the service.
What is the problem?
Housing and workforce insecurity were suggested as key reasons for financial difficulties among young Australians.
The report found that young people needed more stable and better-paid work to elevate overall wellbeing, while wide-ranging efforts were needed to provide financial management and support programs.
Buy now, pay later
The buy now, pay later system is offered by companies such as Afterpay and Zip Money. The system allows people to delay the total payment for purchases upfront, and pay the rest in future instalments.
76% of people often experiencing financial stress were more likely to use ‘buy now, pay later’ systems than those without financial difficulty.
Cryptocurrency trading platforms were also said to have changed the spending landscape for young people.
The survey found housing structure was a significant influence on the financial health of young Australians.
Over half (56%) of young Australians living with their families were often able to save money. This was higher than those in a share-house (40%) or living on their own (47%).
One-third of respondents living independently experienced financial difficulties often or very often, while only 23% living in their family home encountered similar pressures.
Feeling stuck in life
Three-quarters of young Australians with excellent mental health were saving often or very often.
Only 38% of respondents who said they had very poor mental health were regular savers.
About one-quarter of respondents who were pessimistic about gaining financial security were saving often or very often.