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New Research: The Financially Responsible Generation, with an Appetite for Credit
28 October 2009
28 October 2009 - New research jointly released today by Veda Advantage, Australia's largest credit bureau, and teen researcher Habbo, reveals our next generation of spenders. Generation Z are happy to save, and are more cautious about spending than their Gen Y predecessors, however they lack in some areas of financial knowledge.
The nationally representative online study of almost 2000 teenagers aged between 12 and 18 years, conducted by teenage researcher Habbo (www.habbo.com.au), found Australian teenagers have strong convictions about paying bills on time, and 'do not like owing people money at all'- even if it's to their parents.
The Research also found Australian teenagers were responsible savers, with more than half (54%) of respondents revealing they use their bank accounts for saving, rather than for general spending. Of those teens saving for something specific, tech gadgets (35%) and a car (32%) were priorities, before clothes (21%), education (21%) a house (19%) and travel (18%).
The results highlight a significant difference in Generation Z's financial attitude - with 64% saying they have never missed a mobile phone repayment and 67% of teens explaining they do not currently owe anyone money.
In comparison, recent Veda Advantage research indicates the traditional financial attitude and behaviour of Generation Y (those currently aged 19 to 30 years) is more focused on spending that is financed via credit rather than savings. Veda Advantage bureau data indicates Generation Y is responsible for more than one-third (37%) of Australian's total consumer credit defaults, despite only constituting 20% of the entire credit active population. Gen Y also has more personal loan and telecommunication defaults than any other generation, relative to population size.
The Veda Advantage and Habbo research indicates Generation Z also has an appetite for credit cards, with 31% indicating they 'want one', and a further 7% saying they will have one 'soon'. Almost 10% of Australian teenagers have debit cards and 12% of teenagers currently either have a credit card or use their parent's card.
However, research also reveals more financial education is required to teach teenagers about their financial responsibilities and how to manage their personal credit file. The majority (58%) of teenagers are unaware what a credit file is, and more than half (52%) say they have not had a conversation with their parents about managing money.
Veda Advantage and Habbo research findings include:
- Money is a concern to Australian teens, with nearly three quarters (70%) saying they worry about money,
- Australian teens are considering their finances and their futures with plans to purchase a car ahead of any other major items. This was followed by education, clothes then homes (in the next few years),
- 83% of Australian teens surveyed have a mobile phone; 55% received their mobile phone before they turned 13,
- more than half (52%) have their parents pay for mobile phone bills, while 36% pay on their own,
- Almost two-thirds (64%) of teenagers surveyed have some form of bank account, but more than 80% receive their money from parents or through gifts, and less than 25% have after-school jobs,
- Most teenagers surveyed have a bank account used for general savings and almost 20% of teenagers surveyed use their bank account to save for something specific. 18% use their bank account for general spending and 27% have a bank account which their parents put money into,
- Most Australian teenagers don't shop online and many are not allowed to. Of those who do purchase online, most buy using their parents' credit card or through PayPal.
Kelvin Kirk, Head of Marketing and Communications at Veda Advantage said while Gen Z currently look like they are responsible savers, some of their attitudes may also have been affected by the current financial climate. He also said their lack of financial education and knowledge about credit files was concerning.
"Veda Advantage is calling for parents to sit down with their teenagers and explain responsibilities involved with managing money and the importance of monitoring their credit file. Although many teens will not yet have a credit report, they should be aware that their credit file is like their financial passport, and it stays with them for life.
"As they start applying for credit, it is vital Australian teenagers are financially literate and aware of their financial obligations.
"The reality is not paying phone bills now might mean you are restricted from buying a house in a few years, which is what the Research indicates what many teenagers intend to do," Mr Kirk said.
Jeff Brookes, Regional Director Asia Pacific of Habbo said although Generation Z is beginning to spend and consider purchasing major items, the results of the Veda Advantage and Habbo Research suggest teenagers have good intentions to pay their bills on time. "Previous Habbo Research has identified that Generation Z is more grounded and traditional in their value system than Generation Y. Again we see evidence of this through the financial survey - as teenagers have strong establishment goals of car and home ownership and investing in their education versus spending money on travel which was more popular amongst Generation Y. Australian teens are considering their financial future and putting their quality of life ahead of immediate materialistic goals.
"Australian teens desire to be in a position where they can be homeowners in the next five years. In order to make these aspirations a reality they will need to bolster their knowledge of money and credit. Parents and schools will need to play a larger role in financially educating their teenagers," Mr Brookes said.
-Ends-
Media Information:
Sally Robertson 02 9492 1089 or mobile: 0400 927 003
Emily Venardos 02 9492 1033 or mobile: 0413 743 737.
About the research:
The Veda Advantage and Habbo Research was conducted on the 14th to the 25th of September using the Habbo social networking site. The online survey of 1942 Australians between the ages of 12 and 18 was an equal ratio of males to females and nationally distributed.
About Habbo:
Habbo is a richly colourful, multi-dimensional virtual world and community for teens. Users join by creating a fully customized online character called a Habbo. From there, they can explore many public hang-outs, participate in a variety of activities, connect with friends, decorate their own rooms, and have fun through creativity and self expression. Currently there are Habbo communities in 33 countries on six continents. To date, 126 million Habbo characters have been created and 11.5 million unique users worldwide visit Habbo each month (source: Google Analytics). www.habbo.com.au
About Veda Advantage www.vedaadvantage.com.
Veda Advantage has been at the forefront of the information business for many decades. Issues such as privacy, data security, fraud and business intelligence are part of our commercial landscape. A division of Veda Advantage, Information Services and Solutions Ltd (VISS)* holds the country's largest database of credit files for more than 14.5 million credit-active Australians. The vast majority of applications for credit in Australia are checked against the files held by Veda Advantage - providing businesses with the information and knowledge to assist them in making informed decision in customer acquisition and credit risk management.
You can apply for a copy of your business or company credit file at www.mycreditfile.com.au.
* Veda Advantage Information Services and Solutions Ltd is a member of the Veda Advantage group of companies.
