At BTO, we carried out a sample survey to understand the financial standing of university students in Singapore and their perception towards financial planning.
Foresight, and sound economic and financial policies over the past few years have propelled Singapore into a global financial hub. This demands the need for people in Singapore to have adequate financial literacy as it allows them to see the importance of financial planning. Financial planning helps individuals determine their short and long-term financial goals, and create a balanced plan to meet those goals.
At BTO, we carried out a sample survey to understand the financial standing of university students in Singapore and their perception towards financial planning. In our survey, 73% of university students have indicated that they are stressed about their current financial situation.
With living costs and tuition fees rising almost simultaneously, it is no surprise that there is a growing number of young people of who feel enormous pressure to tighten the purse strings. Furthermore, it is found that 87% of university students feel that they are financial not ready for the future.
The general sentiment among students when asked about their financial worries is that they won’t be able to sustain their lifestyle.
Some also mentioned that they are unsure about financial planning.
Financial worries of students
The number one financial worry of students is the inability to find a job that pays well to support their lifestyle followed by, managing monthly expenses. Feeling cash-strapped has real-world consequences for students – the stress can cause them to take up a part-time job to start saving early and thus, neglecting school work.
The ageing population in Singapore has a major impact on the youth of today. Our survey found that close to half of the university students surveyed felt that supporting their aged parents is a cause of financial worry. Singapore’s birth rate being below the 2.1 replacement level forces more young people to support the older generation.
Life goals of students
Cash is still king as 87% of university students have listed earning a lot of money as their life goal. A 2017 study by the Economist Intelligence Unit reports that Singapore retains its position as the globe’s priciest place to live. With the rising cost of living in Singapore, it is natural to have ‘earning a lot of money’ as a life goal especially since majority of the university students face financial stress.
As the younger generations (Gen Z and Millennials) are known as the ‘wanderlust’ generations, travel is still one of the top few life goals for university students. 70% of university students have travel as a life goal. The impact of social media can be seen on the travel culture among the young. Moving away from traditional advertising, companies use influencers to promote travel destinations urging young people to develop the desire to travel.
Despite the financial stress and ambitions, 73% of university students have never seen a financial adviser.
Most university students feel that they are not ready to seek financial advice.
The general sentiment towards financial advisers among university students is parallel to the findings from our previous Retirement Readiness Survey in 2017.
Change of approach
Advisers should attempt to reach out to their potential clients with an aim to educate. With this improved financial literacy, the client will be empowered to have confidence in making their own informed personal financial decisions with the adviser according to their priorities and needs. This might help change the perception of financial advisers among young Singaporeans to work collaboratively with advisers, rather than in a one-sided pushy way.