Young people: fear and loathing of personal finances

Young people: fear and loathing of personal finances

3 minute read

A study commissioned by Aegon into financial awareness highlights the extent to which young people in the Netherlands loathe dealing with their finances.

Many are afraid to even approach the subject. "When I see what's left over; it just stresses me out," and "it is rarely good news," and "it's hard to face the facts," are just some of the responses that the study collected from respondents between the ages of 25 and 34.

Apps give no relief

Other respondents in the same group said they lacked the time, had better things to do or just hated having to deal with their finances. This age group is highly internet savvy and has easy access to apps that can help them manage their finances, yet these tools do not seem to alleviate their fears or disdain for dealing with their finances.

Generational gap

Another reason these findings are significant is that people in this age group are usually wrapped up in major life events such as getting married, starting a family and buying a house. All of these life events can have an effect on retirement which makes it the right time to pay more attention to retirement savings. People over 65 were the least likely to loathe dealing with their finances and were found to have the highest level of financial awareness.

Financial awareness as a predictor of happiness

The study also showed that people who hate dealing with their finances have less financial awareness and are prone to be less happy because of it. Financial awareness was revealed to be a better predictor for a sense of happiness than other characteristics such as educational background, income or residence. The segment of the Dutch population with a high financial awareness are happier in love, feel healthier, and have a greater number of social contacts.

Study held for fourth year in a row

Aegon has been commissioning quantitative studies into financial awareness and financial literacy since 2015. A panel of experts from academia, a charity specialized in financial literacy for young people, and Aegon lead the study which is carried out by a market research agency. This most recent study was held in December 2018 among 1,034 Dutch respondents. An in-depth follow-up survey was held in January 2019 which examined the respondents' reasons for their distaste in dealing with their finances.

Increasing financial literacy

As in many places around the world, residents of the Netherlands have to take more personal responsibility for their financial futures. Aegon has developed the online 'Goed met geld' (Mastering Money) test for the Dutch market so that people can discover how they interact with money and what areas they could improve upon financially. Users also receive information based on their personal circumstances. As of today, more than 100,000 people have taken the online test.