Arthur Coaching Ponder Question:

How far should a coach get involved in young people’s finances?

Georges Petitjean

Founder, Arthur Coaching

Arthur trains individuals to become professional Young People Coaches. Our mission is to facilitate access to quality leadership coaching for young people.


Saving Young People

shutterstock_132478784For many young workers, after rent, living expenses, student loan or credit-card payments and incidentals, there’s not much left over, making it difficult to even imagine saving.

For those without jobs, it’s easy to get into debt just paying for essentials like food. Pleasure has to be taken where you can get it. Saving seems impossible.

A report into debt by Demos found that 22% of 18-to 24-year-olds say their debt has ‘increased a lot’, compared with 4% of those aged over 65.

A relatively small number of young people (30% of 18-24 year olds and 22% of those 25-34) put their debts down to investing in their future (regarded by Demos as a positive cause of debt). But the majority feature negative explanations for debt, including unexpected expenses (28% and 35% for the two age groups) and help to pay for the basics – 27% and 28% respectively.

Managing money can be difficult for young people. They don’t have much, generally, and their motivation to save up for the future is weak. When you’re young, ‘the future’ is either tomorrow or a long way off – and retirement is so far away, it’s unthinkable.

Living in the moment – having fun now and worrying later – is the strategy of many young people, which accounts for rising credit-card debt. So how is a 20-something to save? Here are some strategies to support young people with budgeting – or even to use for yourself:

Set goals. Start tracking your spending. You might be surprised to see where your money is actually going.

Use the 50-20-30 rule: Look to spend 50% of your budget on fixed costs like rent, utilities and car payments; 20% toward financial goals like building an emergency fund, paying off credit-card debt or saving; and 30% toward flexible spending like groceries, entertainment or shopping.

Prioritize setting aside one month’s net income in a separate savings account for emergencies. Ultimately, work toward saving six months’ income.

Next, work on paying down so-called “bad debt,” like high-interest credit-card debt.

Automate. Set up a direct debit or a recurring automated transfer so that a fixed amount goes directly into your savings account without ever touching your current account.

Self-audit. Think about all the various subscriptions you have to magazines and entertainment sites like Netflix, Hulu and Spotify—or even satellite or cable. Do you really need all of them? Cancel at least two subscriptions.

Just say no. Going out, meeting friends, and being sociable often costs money – for eating, drinking, travel. If you do it often, it all adds up. Plan for the month, budgeting for known, important events like a friend’s birthday dinner. If other spontaneous invitations come up, you can choose whether or not you say yes.

Cash only. If you have a tendency to overspend on credit cards, go all-cash. Abandon your credit card and carry sufficient cash for what you need that day. If you run out of cash, you can’t spend any more.

With some financial understanding and planning, young people can have fun today, and feel secure for the future.

Georges Petitjean

Founder, Arthur Coaching

Arthur trains individuals to become professional Young People Coaches. Our mission is to facilitate access to quality leadership coaching for young people.

Arthur Coaching: The Rise of Youth Debt

shutterstock_98788745Young people are burdened with increasing levels of debt, according to a poll published in 2014 and commissioned by think tank, Demos. People in their 20s-30s are either “putting their lives on hold or racking up substantial debt”.

The Populus poll found that more than half (55%) of those aged 18 to 24, and 48% of those aged 25 to 34 say their debts have increased over the past five years.

The majority of young people have debts of more than £2,000 – 45% of those aged 18-24 and 56% of those aged 25-34. However, almost one-fifth (19%) of 18-24-year-olds and 22% of those aged 25-34 owe more than £10,000.

Research in 2014 by Citizens Advice Bureau (CAB) found that more than six out of 10 young people – 62% – are turning to payday loans – high-cost loans aimed at people struggling.

High-interest loans often spiral out of control, leaving people in debt with nowhere else to turn but into a vicious circle of more borrowing. 10% of CAB clients in serious debt are aged between 17 and 24, of whom just 8 are in debt because of mainstream credit, such as an overdraft, bank loan or credit card. People aged 17-24 make up more than 15% of CAB cases where their debt has been caused by loans charging high rates of interest.

Because people under 18 can’t be held to loan contracts, and the debt cannot be legally enforced, no loan company offers loans to people so young. However, some young people have lied about their age and taken out payday loans online.

David Cameron has said that we are “all in it together” to tackle the deficit. That’s all very well. However, university tuition fees have been trebled while benefits for pensioners have remained.

Additional pressure is placed on people just starting out in life. The costs of studying for a degree, buying a house and starting a family are higher than ever. People in their 20s and 30s face a choice between putting their lives on hold, or racking up debts.

If you do need to borrow money, opt for a less expensive standard personal loan or credit card: usually a much cheaper alternative than a payday loan.

However, only take out a credit card, personal loan or other borrowing if you are sure you can pay back what you owe. Before resorting to that, be frugal and see where you can reduce your outgoings and make savings.

If you’ve already taken out a loan, or you are in debt and struggling to pay, do seek professional help. You can find your local Citizens Advice bureau in England and Wales on Get advice online at Consumer advice is available from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers. Alternatively, call National Debtline on 0808 808 4000/ 0808 808 4000.

Georges Petitjean

Founder, Arthur Coaching

Arthur trains individuals to become professional Young People Coaches. Our mission is to facilitate access to quality leadership coaching for young people.