Young adults ‘falling victim to financial mismanagement’

Young adults need to adopt a more cautious approach to spending if they are to stave off debt worries. 

According to a study carried out by Experian CreditExpert, 25 to 34-year-olds are the most likely to incur charges for financial mismanagement. For example, 26 per cent admitted overspending on a credit or store card, while 38 per cent have forgotten to make a payment on time and 18 per cent have struggled to pay back a big purchase. 

On top of this, one in four are still dealing with a financial hangover from their student days. This demonstrates how easy it is for people to rack up debts if they are not diligent about their money situation at all times.

James Jones, head of consumer affairs at Experian, said too many consumers had fallen into the trap of spending "like there's no tomorrow", without giving their future any real thought.

"However, a savvier financial outlook will ensure 2014 is a much better year for those who want to take control of their finances. We could all benefit from doing a credit health check – budgeting for the year ahead, ensuring we are getting the best deals on our regular expenditure such as utilities and insurance, and planning ahead to ensure our credit rating is in tip top shape," he added.

The body released a number of tips to go along with research and these are designed to offer young adults some insight into how they can take control of their financial situation. It emphasised the need to take budgeting seriously, as this will give them a clear indication of how much disposable income they have. 

Moreover, Experian believes individuals need to appreciate the difference between want and need, as far too often consumers splash out on expensive purchases when they would be much better off putting the money to one side for a rainy day.

By James Francis