Young are hardest hit but can rise above it

MY editor emailed me with a request: “Can you do a piece on the Treasurer’s economic update to the nation?”

My answer? Sure, and I can do it in one line: “The Treasurer is throwing the kitchen sink at COVID like there's on tomorrow." So I thought we’d talk about the people who are really getting screwed right now. People like Louise, who sent me this question: “Hi Scott, I’ve been reading The Barefoot Investor as I am interested in kickstarting my financial freedom. However, I am only 17 so I don’t have a strong income. I am working towards setting up different bank accounts but I am having trouble with the advised percentages for each. Any advice on how to get ahead?”

Yes, Louise is still a kid. She’s not old enough to vote, but she’s young enough to spend the rest of her working life paying off the multibilliondollar promises our politicians are making today.

Thankfully, the concept of shouldering an unfair amount of government debt isn’t high on her priority list. Louise is focused on the here and now — and with good reason: her age group has been the worst hit, with a staggering 44 per cent of the jobs lost belonging to 15-to-24-year-olds.

Now, Louise, here’s the thing: our lives are shaped by our experiences, right? My generation’s experience has been 29 years of non-stop economic growth, falling interest rates, and rising house prices. Yours will be different.

You’ll be starting your working life at the bottom of the employment ladder, leaning up against the worst downturn in a century.

Contrast this to your parents and grandparents, who’ve enjoyed the greatest economic boom in history. Lucky buggers, right?

Well, maybe. However, the irony is this long boom has softened people up. It’s allowed many of them to paper over their financial mistakes. And, as a result, many older Aussies have never had to learn much about managing their money.

You will, though. You won’t have a choice. Yet thankfully you’re two steps ahead of most people — you’re asking the right questions while still a teenager. Don’t fret about the percentages; you’re already on the right track by setting up your savings buckets.

And if all this doom and gloom is getting you down, know this: the last generation that encountered genuinely tough times was that of your great-grandparents, who lived through the Depression.

The tough times hardened them into one of the greatest generations in history.

Scott Pape is an independent, community-based financial counsellor. Information and opinions provided in this column are general in nature and have been for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions. If you have a money question, go to barefoot investor.com and #askbarefoot