Secrets to a positive bank balance

Words by Laura Green

Image by Nai Nai Doh

In an Australia of negative gearing and tax cuts for the wealthy, how can young people stay positive and take control of their financial futures?

Young people feeling bleak about their financial futures is no surprise in an economic climate where millenials are being written off by mainstream media as spoilt, greedy, brunch-loving couch potatoes and where government policy favours a voter base of comfortable, middle-class baby boomers. Baby Boomers saw the introduction of free healthcare, cheap housing costs with large housing loans and low interest, and free, then cheap, tertiary education. These things have contributed to their wealth while simultaneously causing exponential inflation for young consumers of today.

This is not a generational war we should be waging. However, it’s a war against bad policy which is crucial to our futures. Coalition budgets historically look after their target demographics, and this year’s budget falls down in youth unemployment support. Newstart and Youth Allowance payments have been frozen for another year, despite the current payment threshold stagnating for the past two decades.

In the midst of concern there must be action. How we work is constantly changing, full-time work is decreasing and contract work is on the rise. Taking advantage of the current job market is imperative, which means contract work through mobile apps could be beneficial. Jobs offered by the Gig Economy are ideal routes for young people because they provide “flexibility, independence” and for matching a skilled worker to a consumer “they’re fantastic”, Associate Professor in RMIT School of Economics, Finance and Marketing, Dr Jonathan Boymal said.

“When you’re young, it’s probably not a bad idea,” Dr Boymal said. However, he acknowledged the strain this can put on young people.

“The gig economy can be associated with a lot of anxiety. Economic anxiety, personal anxiety, without having the support of a traditional employer.”

Dr Boymal emphasised routine, structure, organisation, and self-care are important if you choose to—or have to—embark on this kind of work. He also recommends finding a purpose and inspiration behind the work you undertake.

This job market is tough, particularly when businesses categorise employees as contractors. Dr Boymal said that often “most of the people in the gig economy are paid below the minimum wage” and aren’t entitled to sick leave. They have to pay their own superannuation too, and considering the confusing state of Australia’s super system, it’s no wonder many people end up with a multitude of accounts containing very few savings.

“If you’ve got a business model that’s only succeeding on the basis of undermining workers’ rights, then that’s probably not sustainable.”

Action from workers could create a sustainable skill sharing job market, because millennials largely provide the consumer and labour forces required to keep the industry alive. Without our support it could crash. The rate of youth unemployment is at a high of around 20% for those aged 15 to 24, so contract jobs might only be a temporary, high stress form of work. Owning a house is off the table for many millennials, where high unemployment and inflated house prices cause “the number of years it takes in terms of saving for a deposit” to become an issue, according Dr Boymal.

Financial stability comes from assets and a house is just one kind of asset. Dr Boymal pointed out people aged 18 to 24 make up 9% of investors—a number which is increasing because of “a growing level of optimism about the future”, so “young people will choose to invest more” as their confidence in this area grows.

“Young investors are more cost conscious,” he said, which can lead to the avoidance of seeking professional guidance, but this is another area which millennials should explore to gain the greatest return. Advisory firms and online ‘robo advice’ use market trends and algorithms to provide lower-risk knowledge. These investments can serve as a passive income if you are careful in your choices, so research carefully while you save for the right investment. Making informed financial choices will go a long way to achieving a comfortable future for ourselves.

“In terms of relative improvements in standards of living, it’s unlikely we’re going to see what our parents saw,” Dr Boymal said, but he encourages young people to turn our attention to Canberra.

“What’s important is being politically active. You can vote, and over time millenials are going to make up a much larger voting block, and political parties are going to pay more attention. And maybe it’s time to set up a party focusing on issues millennials face.”

So no, there won’t be a financial apocalypse as long as we keep grinding along, though that doesn’t mean we have to grin and bear a growing problem. It’s time to stop underestimating our financial and political power. Maybe then we’ll be able to afford the occasional smashed avo and a modest home of our own.  


Catalyst has been the student publication of RMIT University since 1944. We may be older than your parents but we’re still going strong!

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