Young people need educating about money management, charity says

It seems that nothing can keep troubled Hollywood actress Lindsay Lohan away from the shops. Despite being booked in for a drug treatment programme in an upmarket rehab clinic, the 21-year-old still can’t seem to get enough of trawling boutiques and splashing out on whatever takes her fancy.

Lilo shops til’ she drops

Her latest outing saw her visit Mary Jane’s, described by NBC as "a trendy women’s boutique" in Park City, Utah. She reportedly showed a lot of interest in a range of "lacey undergarments" from the Honeydew Intimates collection.

Ms Lohan is in rehab as part of a deal reached with prosecutors over a number of drink-driving offences earlier this year. As part of a plea bargain she must spend one day in jail, complete ten days of community service, and complete the drug treatment programme she is currently enrolled on.

Retail therapy

With so much on her mind, people could be forgiven for wondering how she can think about going shopping. Perhaps it is a form of retail therapy, or is it just another addiction?

Some stars can’t seem to keep out of the shops and at least one British charity thinks the same thing is happening to people in more everyday jobs too.

According to Credit Action, a national money education charity, young people in Britain have been "educated into debt but not about debt" – a reference to the ever-increasing amount of debt that graduates now find themselves saddled with.

Education, education, education

Deputy director Chris Tapp says that increased effort towards educating young people about the potential downside of getting into "heavy personal debt" would have more effect than increased government regulation of the sector.

However, he does believe the recent interest rate rises have had the effect of curbing some people’s desire to spend on borrowed money – young people in particular. He says that the rises "will help people tighten their belts".

We’re already starting to see people tightening their belts

"We’re already starting to see people tightening their belts, when we look at some of things the British Retail Consortium and these types of groups are saying about how much people are spending in the shops," he explains.

"We’re already seeing people having to think more carefully about how they’re going to borrow and how they’re going to spend, and I think the value of further regulation is questionable in one way."

Understand the risks

Mr Tapp thinks that it is essential that people become better educated when it comes to borrowing, debt and managing money in general. People need to "understand the risks they’re taking on" and "not simply borrow because they’re able to".

Credit Action has come across a large number of cases where people have been borrowing money only on the basis that their bank or loan provider was prepared to give it to them. They took out loans without considering whether they really needed it in the first place and whether they would be able to pay it back.

Lessons on debt in school?

Mr Tapp believes there is a lot more the government could be doing "in terms of the education system and to help people, particularly when it comes to education in schools, and education now for students and young people who are having to take on a lot of debt to go to university".

Many of these he believes are "not really being educated as to the risks of having considerable amounts of debt once they leave university" and are then "getting into trouble with credit cards and these types of things because they’ve been educated into debt but not about debt".

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