Cash, investment and the cost of living top young writers’ agenda

What can young people do with their finances to cope with the rising cost of living? What could encourage more people to invest in the stock market? Is the end in sight for cash?

These are some of the questions tackled by more than 120 school students who entered this year’s FT competition to find the best young financial journalists in the UK.

Organised with the London Institute of Banking and Finance (LIBF), the contest produced three winners, whose entries are published, in edited form, below.

Winner 18-19 age group

Rohan Noble, 18, Queen Mary’s Grammar School, Walsall, West Midlands
How can we encourage more consumers to invest in the stock market? 

The advent of online and app-based platforms, such as IG and Freetrade, has democratised stock trading enabling a wider range of people than in the past to invest in the stock market.

However, currently, just one in three Brits own shares and women are 16 per cent less likely than men to make investments. Evidence also shows higher-income households are more likely to own equities than the less well-off.

So promoting stock market investing to women and to lower-income households would be a good way to encourage investment overall.

Young investors often follow financial influencers, or “finfluencers” in social media, however, most are male. While prominent female finfluencers exist, such as This Girl Talks Money, there is too little financial advice for women. This disparity needs addressing.

Cultivating investing among lower-income households may prove challenging as they have less disposable income than higher-income earners.

Improving grassroots financial literacy is vital. The government could promote stocks and shares in disadvantaged regions, put the message out on social media and make personal finance lessons compulsory in schools.

Winner 16-17 age group

Moradeke Akisanya, 17, Cheltenham Ladies’ College, Cheltenham
What financial tactics can young people use to cope with increases in the cost of living?

During the Covid-19 pandemic, a large number of young people lived with their parents, postponing their “freedom day” and prolonging their “financial virginity”. 

Now, in the midst of the cost of living crisis, young people must foot ever-increasing bills.

How should you manage your money? Here are some ideas:

First, track your expenses. There are hundreds of apps that can help. Personal finance apps, such as Mint, allow users to connect their bank accounts, allowing transactions to be categorised and monitored, including direct debits and standing orders. 

Next, create a budget. Money Helper’s Budget Planner offers a place to manage your finances. So does Goodbudget, which allows people to sync their budgets with a family member or friend.

Also, prioritise what is essential before you splurge. Under the basic 50/30/20 rule, 50 per cent of your income should be set aside for needs, 30 per cent for wants and 20 per cent for savings. As an advantage of youth is low costs, you can try to save a third of your salary, so you are better prepared for any future financial difficulties.

Next, use loyalty cards. The consumer group Which? estimates that shoppers can save between 50p and £10 for each £100 spent. My personal favourite is the Boots card. Collecting 4 points for every £1 spent, I have accumulated so many points that I often pay at Boots with my advantage card, so my bank account breathes a sigh of relief. 

Finally, shop at discounters such as Aldi and Lidl. 

Although the prospects may seem bleak, good money management can be key to navigating the cost of living crisis.

Winner 14-15 age group

Tife Yoloye, 14, The Leys School, Cambridge
Cash — can it stand up and be counted or is the end of physical money in sight?

While digital finance is advancing rapidly, physical money will not be eliminated in the foreseeable future.

In the past, illicit transactions were highly dependent on cash. But research by We Fight Fraud, a crime prevention group, reveals that far from stopping illegal proceedings, cashless payments actually encourage them. Until we find good solutions to cyber crime, we would only be enabling online illegality by going totally cashless. 

Gambling is also an issue. Lockdowns popularised gambling from home, making it easier to bet using a credit card. Even those who didn’t gamble previously felt encouraged to try.

They risk falling prey to the social problems associated with gambling, such as losing a job and the breakdown of personal relationships. 

Many people lack money management skills. Bad spending habits have been fuelled by the use of credit cards because people are more likely to overspend. If society goes cashless, consumer debt could increase, placing millions more people in financial difficulty.

Finally, if we go entirely cashless, economic inequality could worsen. When payments rely entirely on technology, everybody must be fully equipped with the right tools. But in the UK almost 2 per cent of the population is unbanked.

Currently, more than 8mn people in the UK make cash payments daily: disabling their way of life would be a mighty price to pay for digital advancement. An array of challenges has yet to be solved.