As young people get older, they often lose money. 37% of MBO students aged 18 and older currently have a debt. One in four has payment arrears.
If young people live on their own, the debt situation increases. What are the causes and consequences of financial problems among young people?
We distinguish between formal and informal debts.
- Formal debts his debts with authority such as banks, DUO, health insurance and mobile providers. Student loans and overdraft are the most important formal debts among students. In addition, payment arrears occur at the health insurer and the telephone provider.
- By informal debts we understand debts with friends and family. Students mainly borrow from friends and parents.
Origin of debts
The Libud study Chances of financial problems (2016) shows that a person’s attitude and financial skills have a major influence on the emergence of financial problems. Inadequate financial management, financial ignorance and no need to save and plan ahead, increase the chances of financial problems.
An impulsive, seductive and status-sensitive attitude increases the likelihood that someone is difficult to deal with money, can not manage and has debts. The influence of advertising and the willingness to participate in fads and trends play a role in this.
Living or living at home
Libud notes that the transition from living at home to living independently is difficult for many young people. Libud studies show a big difference between the debt situation of students living at home and away from home. Out-home students more often have a debt and on average a higher debt.
Factors that play a role in the emergence of debts
- events or changes in the life phase such as living on their own
- the psychosocial situation: including addictions, lack of resilience and compensatory behavior
- intellectual disabilities: skills and abilities
- financial education
- the possibilities to make debts
- budgetary reasons: income decline or expenditure increase, often combined with less control on the financial situation.
Debts generate stress. Experiences from MBO teachers show that students with debts are more often absent, tired because of a lot of work, little attention to school spending, their study costs difficult to pay or even stop with school.
In addition, debts obstruct young people to build a future. You are more concerned with paying off than with the future. Salary is used directly for debt repayment. It is more difficult for these young people to live on their own, given the limited financial resources that remain.
What can you do?
It is important to discuss financial problems. See together what solutions there are, appropriate to the situation and personality of the young person. The sooner you are there, the more problems are prevented. What can you do and how can you focus on prevention to prevent financial problems among young people?