Spendthrift young Scots heading for financial disaster by failing to save

A NEW breed of spendthrift young Scots is heading for a future of financial disaster, a new study has revealed.

It blames a "live-for-today" lifestyle which it claims is putting thousands of under-twenties into serious financial difficulties. The major analysis of spending habits uncovered a generation of young people in Scotland who have lost their parents’ instinct to save for the future. It shows they would rather spend their money on alcohol, fast food, fashion accessories and mobile phones than build a nest egg.

The research shows that 45 per cent of Scots in their twenties save nothing at all. Among those who do put money away, the average is only 47 a month - just over 10 a week.

More than half of those interviewed said they spent an average of 38.40 a month on alcohol. And nearly a third admitted they spent an average of 22 a month on smoking.

Meanwhile, mobile phone bills accounted for an average 23 a month, with more than three-quarters of young Scots naming mobiles as a major part of their total monthly expenditure.

Stephanie Lawson, 20, from Edinburgh, said she admits that adding to her collection of handbags is more of a priority than her savings.

Earning a salary of 12,300 from a job as a customer services assistant with a bank, she spends roughly 270 a month on rent and on paying off a bank loan from two years ago. She spends the rest of her monthly wage on socialising and shopping.

Stephanie, who lives with her parents, said she seldom has anything left aside until next pay day.

"I must admit I like clothes and bags," she said. "I’ve got dozens of them. I wouldn’t say I’m addicted to buying them, but if I’m out shopping and I see something I like, I’ll buy it.

"Even though I’m still at home, Edinburgh is very expensive and it’s hard to put anything aside. Before you know it, you’ve spent nearly all of it."

But she admits that she’ll have to trim back her spending in the near future as she looks to move away from the family home.

She said: "I’m conscious that I’ll need to start thinking about putting money aside for a flat."

Cynthia McVey, a psychologist at Glasgow Caledonian University, said the research marked a worrying trend.

"More than ever, we are living in a consumer-driven society which has led to a ‘now, now, now’ culture.

"Perhaps younger people look at their parents and realise that they have spent their lives saving and don’t have much to show for it. Their pensions may be worthless, which makes young people think it is a waste of time to build a nest egg. Instead, they decide to spend the money while they are young and can enjoy it. Their thinking is that they will worry about it in the future," she said.

"Much of the problem is that money is being thrown at young people by finance companies. They are always being offered credit cards."

Matt Grayson, of Birmingham Midshires mortgage bank, which commissioned the research, said it uncovered a sea-change in attitudes.

He said: "A live-for-today mentality is preventing more and more young people from building up a savings nest egg.

"Obviously, people in their twenties should be enjoying themselves, but far more young people see drinking, mobiles and cigarettes as a priority."