Figures collected by DP Credit Bureau from payment data of its financial institution members revealed that the percentage of defaults from this age group rose from 5.07 per cent in January 2009 to 7.16 per cent in December 2009. They also recorded the steepest percentage increase in bad debts during 2009."
"Unique to this age bracket is that fact that those who are married had higher default rates than their single counterparts. For all other groups, married individuals had a lower rate of default."
Read more here and here.
"Unique to this age bracket is that fact that those who are married had higher default rates than their single counterparts. For all other groups, married individuals had a lower rate of default."
Read more here and here.
In other words, 1 in 14 Gen Yers using credit will default. Since most have credit cards, how big was your Gen Y graduating class in poly/uni? Apply this ratio and you will get an idea of how many of your friends are defaulting right now, especially those who are married.
This age group is also in the phase where many have just stepped out of school, started working, and are preparing for that dream (expensive) wedding, new home and renovations. A rather tumultuous phase.
Many graduated from tertiary education in the red, i.e. with a study loan to repay. Coupled with the discovery of ostensible 'financial independence' from the parents for the first time and easy access to credit (cards), it is not unimaginable that many will leap into a consumption frenzy.
The iPod/iPhone/iPad/Macbook, beach holidays, nights at Butter Factory, dinners at Dempsey, macaroons in a box tied with a ribbon, hair salon trips, mani/pedi-cure packages, gym packages, the LV bag/wallet/belt, the Ted Baker shirts, the 'man-boy toys', the car, the HDB flat/apartment, glossy renovations, dream wedding & gown, the private hospital maternity package, the purebred toy puppy to complete the picture etc...
You are only young once. You love yourself. You deserve the best perfect life money can buy. Buy/enjoy it now, think later.
But wait... Didn't an earlier MOM report highlight that 1 in 3 poly/uni grads are employed on contract basis? This must affect the income stability of this group, and its ability to repay its debts.
Furthermore, the downturn and the wide opening of floodgates for foreigners to work in Singapore (subjecting these entry level white-collar jobs to unprecedented international competition) render the slice of the pie for Singaporean young adults unstable and perhaps even on the diminish. This will also lead to future costs.
But of course, these income/affordability factors are somewhat 'invisible', especially if one refuses to see and is stubbornly determined to lead his 'dream post-poly/varsity lifestyle'.
The spending habits and their income situation are not squaring off. The calculations I did in 2007 still stands. And my suggestion of Basic Personal Finance Module for poly/varsity students has become even more relevant yet not implemented.
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