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Debt settlement, a growing problem for the younger generation

June 8, 2020

The proportion of young people applying for debt relief has doubled in the past year. The statistics from Kronofogden show a comparison between January - May 2019 and January - May 2020, where the younger generation is a major risk factor.

"If you do not help these people now, there is an obvious risk that they will eventually become highly current as customers at Kronofogden and for debt restructuring. And of course we do not want to",
says Per-Olof Lindh, unit manager at Kronofogden

Is young people's financial naivity is a major risk factor?

Yesterday we read how Kronofogden is struggling with the escalating problem of increasing amounts of young people applying for debt relief. A situation that is directly linked to young people's lack of financial literacy.

The well-written article in DN, by Dan Lucas, clarifies the importance of acting in the here and now to avoid more young people getting into financially unsustainable situations. Something Per-Olof Lindh, unit manager at Kronofogden, emphasizes in his comment here:

“If you do not help these people now, there is an obvious risk that they will eventually become highly current as customers at Kronofogden and for debt restructuring. And of course we don't want that."

He believes that there is a big risk that Swedes make the conversation about money a taboo. He believes that young people should be able to talk about finances with any adult who is close to them, such as a parent for example.

“There is some difficulty in talking about finances with someone close to you. You talk about a lot, but very rarely about finances ”

The article is just one in the line that highlights the importance of teaching children about money. Many banks today offer their customers’ children free cards and apps to allow them to spend their own money, but the importance of financial education is easily forgotten and much wider than this. At Gimi, the goal from the beginning has been to give children Financial Superskills© for life. It is less about giving children a card to pay with or ‘just another app’ on their mobile. It is about giving them knowledge for life, an understanding of the value of money and a knowledge of how money can be earned, saved and spent wisely.

In addition to all education inside the Gimi app, we are also driving the topic of making a supplement to the curriculum, which has been noted on a political level, including by Jessica Roswall's motion to the Parliament. At Gimi, we hope, want and believe that this work will contribute to a change and thereby have a direct impact on reducing the number of applications to Kronofogden in the future.

We also hope that more of the major banks will do as Marginalen Bank have demonstrated (read more about partnership here) and act on these warning bells before it’s too late. We should be focusing on children's financial education rather than letting young people spend their money without thought; giving children a financial education is something that we have seen that we are in dire need of. Per-Olof Lindh is quoted as saying:

"It is also a sign that we are not good enough at educating young people in financial issues, whether at home or at school."

What are your thoughts on the article and would you like to slow down this negative progress? Write to us [email protected], we want to do this together with you!

Read the full article: Kraftig ökning av unga som söker skuldsanering

Are you ready for smarter pocket money?