Young people in SH: Buy now, pay later debt trap!

Young people in SH: Buy now, pay later debt trap!

More and more young people in Germany are falling into the debt trap, especially due to the tempting offers from payment service providers such as Klarna and Paypal. As current reports show, around a third of clients in debt counseling in Schleswig-Holstein are between 20 and 35 years old. This means that young people are often overwhelmed when it comes to dealing with money and many have accumulated debts through online shopping. An example from Brunsbüttel makes this clear: Students at the Schleusen Community School had to manage debts of over 500 euros per month in a simulation game. Such simulations are intended to help sharpen the financial skills of the young generation, as NDR reports.

An important part of the discussion around the topic of debt is the so-called “buy now, pay later” model. This payment method from providers like Klarna, which is essentially a loan, offers consumers the opportunity to pay the purchase price 30 days after the order or even later. This leads many people to lose track of their expenses, which increases the risk of debt enormously. Many young people underestimate the fact that late payments can not only result in high costs through interest rates of up to 15%, but can also have a negative impact on their Schufa score Ververbraucherzentrale demonstrates.

Importance of financial education

The question of how to curb rising debt among young people is at the center of much debate. Anouschka Haalck, an experienced debt advisor, makes it clear how important financial knowledge is to avoid debt. “Talking openly about money and debt, even within the family, is crucial,” says Haalck. In Schleswig-Holstein, active work is already being done to combat this development: the topic of consumer education is an integral part of the curriculum. 18 schools are designated as “consumer schools” and provide students with important knowledge about dealing with money in various subjects.

An interesting approach is the “Financial Driving License” project, which teaches young people aged 13 to 19 how to handle money independently and safely. The students prepare for an exam with a self-study book and practice units and receive a certificate if they are successful. Content such as expense management and safe online shopping are covered, which prepares participants for everyday life. The need for such offers is obvious, because the complexity of the financial market is constantly growing, as Consumer Education shows.

Prevention and help

In addition to school education, there are 47 free advice centers for debt advice in Schleswig-Holstein. These offer those affected the opportunity to find out about their financial situation and receive support. Haalck recommends that people who are already in debt should definitely use these services. “Payment deferrals or installment financing should really only be used for important purchases,” she adds.

The key to avoiding debt is learning financial literacy and the ability to seek support early. By empowering young people to make smart financial decisions, tragic stories of debt and financial hardship may be avoided in the future. It is therefore in the hands of society to lay the foundation for a sustainably healthy financial future.