Between lockdowns and removing of restrictions, the transmission of knowledge has undergone fundamental changes. This applies also to the financial knowledge that is taught, or not taught, in schools. It is therefore not surprising that young people in particular would like to learn more about money and finance at school.
While in 2018 89% of the 1010 young people of this survey between 16 and 25 years still wished that “everything to do with money and finance would already be taught in detail at school”, this year it is already 92%. At any rate, this is one of the findings of the forsa „W2 Jugend-Finanzmonitor“ 2021 (a german publication that was translated by Fintune in this article):
The study provides further exciting insights into the relationship between young people and their finances. Spoiler alert: Pocket money is (once again) flowing a bit more lavishly, while the thirst for financial knowledge is increasing and the sources of financial knowledge are continuing to dry up.
The “cash flow” of young people
According to the forsa youth finance monitor, regular pocket money from parents or grandma and grandpa is still the number one source of income for young people. At 57%, even one percent more young people describe this as the most important source of income. Parallel to this slight increase, the vacation job/regular mini-job decreased in its contribution to the cash flow of boys and girls.
Overall, the majority of young people in this survey confirmed that they make a very good or good living with this income. The proportion of those for whom pocket money and the like are not enough to live well has decreased steadily compared with recent years. Unfortunately, we don’t know whether this is due to the new modesty of young people, a lack of opportunities to spend the money, or increasing generosity on the part of parents and grandparents.
Significantly higher banking app usage
According to the study, banking apps are becoming increasingly important in the everyday financial lives of young people. In fact, a good two-thirds of slightly older children said they had used one or even more banking apps on their smartphones in the current year. That’s 23%, almost a quarter more than in 2018.
It is interesting to note here that the parents’ generation can hardly keep up with their children’s pace of digital adaptation. At 54%, only slightly more than half of moms and dads use their smartphones to do their money transactions via a banking app.
Financial knowledge is ebbing away
The question of one’s own level of financial knowledge is certainly always a subjective one, but it is nonetheless one that provides very revealing insights and highlights trends. As far as their own financial knowledge is concerned, the trend among the young people surveyed by forsa is clearly downward.
Indeed, fewer and fewer in the study said they were well informed about financial topics, while more and more rated their knowledge of finance as poor. This group has almost doubled compared to 2018.
This trend is also evident in the generation of parents. However, while here the decrease in the “good” group is almost dramatic, from one-third in 2018 to less than one-quarter in 2021, the proportion of those who consider their parental financial knowledge to be poor remained the same.
An even closer look at exactly where young people’s financial knowledge gaps are particularly large or small shows: In order for the kids to become veritable home builders, a few more steps need to be taken in terms of real estate credit knowledge. On the other hand, almost half of the young people surveyed rated their financial investment skills as good or at least satisfactory. And with 56% then nevertheless many young people know well about how they open a bank account.
Where financial knowledge comes from
If we look at how young people know (or don’t know) about finances, parents are the number one source of information with 83%. The Internet is the second most important source of financial advice with 45%, followed by the bank and friends. School takes only sixth place with 22%, far behind TV and newspapers, but still ahead of social media and influencers, and yes, also far ahead of the tax office.
So in so far as young people listen to their parents, the Internet or the friendly bank and want to invest their money, they are primarily focusing on security. High returns and interest rates also play a role, of course, but flexibility should not be neglected either.
Ethical, social and ecological aspects and thus the sustainability goals (SDGs) of investments are currently “only” important or very important to around two-thirds of young people, but this proportion will certainly be much higher in the future as information about them increases.
Finny, the financial coach
Our mobile banking app for children between the ages of 7 and 12 teaches financial knowledge in an age-appropriate way and turns money and saving into an exciting game. Gamification of money knowledge helps children approach the topic in a way that is natural and exciting for them. Step by step and together with parents, friends and relatives, they can build up important financial knowledge and set clear savings goals.
Regular challenges not only bring fun, awards and rewards, but also ensure that their digital and tangible pocket money account gradually increases alongside their knowledge of the world of money.
The forsa “W2 Youth Financial Monitor” 2021 is available in German language as a PDF: