What does the future hold for our teenagers?

According to a new report from Royal Bank of Scotland there is a large gap between where today’s teenagers expect to be in the near future and where the current reality suggests they will actually be.

Over 50% of the respondents, who were all aged between 12 and 19, said that they would own a house by the time they were 25 when the current reality is that the average age of a first time buyer today is 31.

Here are some of the other headline results from the survey, carried out annually by the MoneySense Research Panel for the Bank:

70% expect to buy a car by 21
87% expect to have left home by 25
46% need more money to be happy

On top of this the report suggests that more young people are worrying about their money today and would consider £1,000 to £5,000 to be ‘a lot of debt’ and 84% believing that it is important to save.

As well as high expectations of early housed purchase the average salary expected at age 34 is £61,700 – significantly higher than today’s average salaries.

The survey has been produced annually now since 2007 and this year’s report has shown some interesting developments. In 2007 20% of those questioned said that they did not keep track of their money but this year this figure had dropped to 10%. That this may be a reflection of the time in which we lives is reflected in the fact that that average amount of money received by those questioned has fallen from £127 per month in 2008 to £88 in 2010, and during the same time period the average amount saved fell from £143.17 to £124.30.

The Report provides a fascinating insight into the spending habits and aspirations of today’s teenagers and includes sections on expected salaries, attitude to debt and financial aspirations.

It is part of a five year independent research study commissioned by RBS to assess the attitudes to money of 12-19 year olds in the UK and the report concludes that “throughout all this the need for financial education is clear. Young people continue to express a desire to learn, to save and to talk to adults at home as well as teachers and experts at school. The RBS Group will continue its 17 year programme of investing in financial education and remains committed to continually improving the MoneySense for Schools programme year-on-year.”

Moneysucks? has always maintained that we need to begin the process of educating people in the best ways to use money, and to ensure that we can control our money rather than letting it control us, as early as possible and it is great to see that RBSD, much maligned recently, is continuing, and in fact expanding, its programme of investing in financial education in our schools.

It’s a programme that will need to be expanded further if some of the respondents to this latest report are not going to be sorely disappointed in the future!

To view the full report click here

Does profit have to be the bottom line?

Martin Stepek, Chief Executive of the Scottish Family Business Association answers a reader’s statement that “The sole obligation of a business is to its share owners and to return a profit.”

What do you think?

Take the last point first, about profit. A business can survive years making losses though this will eventually sink you. It’s lack of cash that kills businesses not lack of profit. So yes, profit is very important for a business but not necessarily each year; it’s the long-term profit that matters more.

Regarding obligations Denmark have passed a law extending the purpose of a business to not only giving maximum return to shareholders but also the obligation to minimise harm to people and environment – i.e. the triple bottom line of profit, people, planet. This is enforced CSR and it’ll be interesting to see if the EU follows up.

Most importantly Oliver is right that presently the sole obligation is to the shareholders but this is not the same in most businesses as maximising financial return to the shareholders. Most businesses are not in fact PLCs on the stock market, owned by anonymous pension fund managers or similar corporate shareowners. 71% of all Scottish businesses are privately owned family businesses, many of them major businesses like Baxters, William Grant & Sons, and Walkers Shortbread. They have the autonomy to choose what kind of purpose they have for their business and most family businesses feel and live up to an obligation towards their employees – many of whom are very long-term – their community (where the owning family have lived for generations) and society generally (family businesses across the world are quiet private philanthropists, the opposite of the typical PLC’s use of charitable giving as part of its PR / branding strategy).

Some family businesses, like John Lewis, even give or sell their businesses to their employees. A private business is essentially a fiefdom within the law. The owners can choose not to maximise return, and in my experience most family businesses don’t seek to maximise financial return but instead see an array of obligations including doing what is right for the owning family as just one of the many.

This is also known as being human