In the world ranking of highest standard of living, the Dutch come in at number 10, trailblazing the world’s wealthiest countries – with the US at #22 and Saudia Arabia at #37. However, that high standard of living and spread of wealth is not equally dispersed among all age groups in Dutch society, especially young people.
According to a recent report by Nibud, the Dutch national institute for budget information, young adults (ages 18 to 27) in the last few years have more trouble making ends meet than before. Nibud, an independent knowledge and advice centre specialized in household finances, has collected data since 1979. It has discovered that in the last five years there is a 70% increase of young people under the age of 24 in debt, which makes them more vulnerable than other age groups. Moreover, 55% of students regularly have no money, and one out of every three students enrolled in secondary vocational school are not taking advantage of their €1,000 annual rebate for health care when filing their incomes taxes.
The transition to adulthood is not an easy one for young people. After turning 18, from one day to the next they are legally able to take out subscriptions, sign contracts, take out student loans, apply for credit cards, and have sole access to their bank accounts, without the aid of parents or legal guardians. For young people that is wonderful.
However, while young people might be physically mature at that age, on the downside they are are often financially immature. According to Nibud, not every high school student (12-18 years old) has been taught how to deal with money, and information about money matters is difficult for many young people to understand. In today’s economy, young adults are also more apt to have fluctuating incomes and less likely to have permanent work contracts.
Also, adolescents and young adults are more susceptible to quick gratification. On social media there are lots of quick money deals with crypto coins, and due to their unstable financial situation, young adults are more likely to invest in these get-rich schemes without first gaining sufficient knowledge. Besides bitcoins, many young adults are likely to spend more on luxury goods that are promoted by influencers on social media platforms.
In the Dutch bestseller De Havermelkelite [The Oak Milk Elite], journalist and social influencer Jonas Kooyman identifies how young adults in urban centres in the Netherlands are socially goated into buying luxury products like €7 oat milk lattes, expensive e-bikes, and become members of expensive gyms, which many cannot actually afford. But the bottom line is that young adults want to keep up with their peers, and belong, which is normal for people in early adulthood.
These developments are not only happening in Dutch cities. In The Sum of Small Things (2017), Elizabeth Currid-Halkett, professor of urban and regional planning at the University of Southern California, argues that this conspicuous consumption among young adults is happening in major cities around the world. Young people, dressed in the exact same clothing and with the same haircuts, lining up for the same expensive morning oak milk lattes, can be found from New York and London to Paris and Berlin. Currid-Halkett argues that this ‘aspiring generation’, who are faced with no or little job security, small chances of ever buying a house in the current real estate market, and stuck with huge student debt, finds gratification in life with the ‘small things’ like a €7 oat milk latte. However, this does not help their financial situation.
To assist future generations out of the same predicament, Nibud aims to improve the situation by encouraging policymakers to include financial education in high school curriculums, to simplify tax forms, and to encourage parents to make their children financially independent before sending them out into the big ‘financial’ world.
Written by Benjamin B. Roberts