Young people’s financial dreams emphasise stress-free life as well as the opportunity to travel, have their own home and take care of their loved ones. They hope to avoid the need to worry about finances and having to check prices when shopping. The norms of ‘ordinary’ life often revolve around substantial purchases. These details were uncovered by the Young People’s Financial Dreams project of the Centre for Consumer Society Research at the University of Helsinki and the financial service provider OP Pohjola, which focused on young Finnish adults’ financial management and future prospects.
Young people themselves play an active role in achieving their dreams. According to them, savings and wealth accumulated for the future would make it possible to invest in things they hold important, such as gaining experiences and living lives of their own.
The data highlighted many self-imposed rules and operating models for personal financial management that the interviewees either observed or would like to observe. Hard work and an entrepreneurial attitude were believed to support the achievement of financial goals.
Saving was considered difficult due to the prevailing economic circumstances, and some felt that investing would only become topical after achieving a sufficient income level. As a sufficient pension was considered doubtful the pressure to accumulate wealth and savings is already clearly evident among young people.
“Young people’s notions demonstrated a clear tension between the uniqueness of youth and the ideal of saving. They dream of freedom from financial concerns, but also of experiences. It's important for us to be genuinely present in those moments where questions related to personal financial management become topical to young people and help them realise their dreams, whether it’s about small experiences or larger dreams,” says Chief Brand Officer Päivi Svens of OP Pohjola.
The young people interviewed for the research project were between 18 and 25 years of age, coming from different backgrounds from across Finland. The interviews focused primarily on their attitudes towards money, saving, investing, borrowing and spending.
Interest in investment, perceived skills and risk tolerance send young people on different paths
The interviews carried out in the research project show that investing was considered the foundation of financial management, and thought to be important for securing the future. However, many understated their own financial literacy and thought that investing would require advanced market knowledge and continual monitoring of the market.
“The ideal investor is independent and self-motivated, making their investment decisions on their own by relying on the knowledge acquired. Investments were often seen as savings and a response to the uncertainty of the future labour market and pensions,” says University Researcher Essi Pöyry from the University of Helsinki, who headed the project.
In terms of self-confidence related to financial themes, young people were divided into two groups: confident and insecure. The former see investing as a routine to be learned and are willing to test different investments. In contrast, the latter associate investing with expertise and fear of making mistakes.
In attitudes towards saving and investing, there were differences between women and men: young women are more systematic and willing to act on the basis of knowledge learned, while young men are more prepared to try things and take chances. Interest, perceived skills and risk tolerance consequently send young people onto different paths, irrespective of similar financial motives.
Attitudes towards money in childhood home make a difference – Social media content plays a significant role
The behavioural patterns of parents were both adopted and either questioned or criticised.
According to the study, young people’s attitudes differ significantly depending on the way in which money was discussed in their childhood homes and how much support they receive from people close to them in managing their finances. Many would have liked to engage in more open discussion about money at home, and it was thought that getting into investing was easiest with the support of loved ones. Instead of financial support, the key is emotional and practical support in planning and implementing financial management.
“Instead of traditional sources of information, peers and influencers familiar from social media as well as financial podcasts introduce these themes to people in an approachable and inspiring way. At the same time, social media was felt to create pressure to spend more than they can afford and skew notions of prosperity, success and typical ways of consuming,” Pöyry says.
The purpose of the study was to determine how young people perceive money and their future financial prospects, as well as their thinking on the financial realisation of their dreams. A total of 46 young people were interviewed for the study.
The goal of research collaboration between the University of Helsinki and OP Pohjola is to produce new and significant information for societal needs that can be used to develop tools for improving financial literacy among young people. The collaboration will strengthen young people’s financial skills, jointly solve sustainable development challenges and promote the sustainable economic success of Finns through scholarly means.
OP Pohjola, which has over two million owner-customers and about 13,000 employees, is Finland’s largest provider of financial services. We provide a comprehensive range of banking and insurance services for personal and corporate customers. OP Pohjola consists of OP cooperative banks and the central cooperative, OP Cooperative, and its subsidiaries and affiliates. We have a mission – to promote the sustainable prosperity, security and wellbeing of our owner-customers and operating region. Together with our owner-customers, we have been building Finnish society and a sustainable future for more than 120 years.