You may have heard the radio ad where the father presents his young adult daughter with keys on her birthday, and she assumes he’s bought her a car. As she gushes with excitement about her “new car”, her dad is in the background exclaiming “It’s not a car! It’s a car LOAN”. The ad was for a financial institution targeting young adults with their car loan product.
Here’s a scary fact: youth aged 16-25 carry an extremely high portion of debt to income, with an average of $2500 in credit card debt each month, compared to an average weekly income of $971. Those in a similar age cohort had an average car loan amount of $11,000. Our young people are paying a lot of interest!
What if, instead of soliciting young adults to apply for credit cards, and take out car loans, banks actually helped teenagers learn to save? Encouraging young teens to put aside a portion of their income each week into a dedicated savings account towards a goal such as a car, helps teach them valuable financial literacy skills.
At the LLL, we want to help your teen to save for their first car. We have dedicated savings accounts that pay a variable interest rate without any bonus hurdles to jump through. We can help teach your teenager that saving towards a goal can be rewarding and easy.
AND, as a bonus, when they turn 18, we won’t be sending them an invitation to apply for a credit card!
For more information, visit our savings accounts page.
- *Research from Roy Morgan Research – on Herald Sun July 13 2013