COVID-19 gives rise to a new generation of money-savvy students
Faced with a tough economic landscape, European students are finding new ways to manage their money. We explore how digital tools are enabling students to seize control of their finances.
2 min read
It’s often said that necessity is the mother of invention; it’s when things get really tough that people mine their ingenuity and come up with the most innovative solutions.
This message comes across loud and clear in our latest research, which surveyed over 5,000 students across Europe to understand how the COVID-19 pandemic has affected their finances and approaches to money management.
Students seize control
Students have been dealt a tough financial blow by the pandemic, but our research suggests that many are fighting back. We see a clear trend towards students pooling resources to make scarce funds go further and keep their university dreams alive. Three quarters (74%) now share utility bills, 70% internet costs and 61% grocery bills.
What’s more, they’re deploying technology to keep an eye on what they owe and avoid awkward ‘who-owes-what’ conversations. More than half (55%) typically use an app to split expenses with friends -- with N26, Paypal and Bizum the most popular choices.
Indeed, while students are often typecast as financially frivolous, our research suggests the opposite to be true. Over a third (37%) keep a close eye on their finances and always know their monthly budget. An even greater proportion (59%) would describe their attitude to money management as cautious -- and 47% consider themselves serial savers. Against all odds, students anticipate saving, on average, €153.56 per month over the coming year.
Financial struggles remain
While our research clearly shows the resourcefulness and resilience of European students, it also highlights the significant financial difficulties that many still face. Over the last academic year, 41% have lost funds due to a change in their living situation. For 18%, costs associated with these changes have amounted to more than €500.
Simultaneously, students had their earning potential reduced, with 26% losing their jobs as a result of the pandemic. When students earn, on average, €339.54 per month from a side job, losing one can provide a substantial financial blow.
Now, as we look ahead to the new academic year, 30% of students are worried about their financial situation, and a quarter (25%) are struggling to find a job and have no savings to fall back on.
Financial institutions step-up
Savings are clearly an influential factor in students’ financial health, so young people need to be encouraged to put money aside from an early age. However, they also need help managing this money.
This is where financial institutions have a leading role to play. At N26, we’re enacting this by developing digital solutions to empower a new generation of financially savvy students. Features, such as Shared Spaces, have been specifically developed to support shared budgeting and spending with flat mates. Meanwhile, MoneyBeam and Split the Bill help students to share expenses with friends -- even if they’re not N26 customers.
By making money management simple and seamless, such applications are helping students take control of their finances and access a more positive university experience.
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