Micro debts, to beat the pitfalls you need a financial education

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They are tomorrow’s savers, but the risk is that tomorrow they will arrive without savings. The familiarity of Millennials and Generation Z with digital products, combined with a drive towards consumption and a lack of financial education, could in fact threaten the capital solidity – which is already limited – of young and very young people. And the growing numbers of the use of payment systems Buy now pay later (Bnpl) among the under 35s (see the article above) do not reassure.

“The fact that these systems are free and allow for payment in installments without interest means that the payment is not perceived for what it really is: a new form of debt”, explains Antonella Sciarrone Alibrandi, professor of economic law and director of the Observatory on private debt of the Catholic University. «In our country the average degree of economic and financial knowledge is very low, and the tendency is to think that there is a loan if there is interest to pay. And therefore, where there is no interest there is basically no loan and there is no risk. And yet the risk exists: it is linked to not being able to properly evaluate how much debt one is assuming, with the possibility of not being able to pay it regularly when due and therefore incurring penalties, which can also be very high”. .

Although these formulas are mostly used for purchases of limited amounts, the sum of many small debts, if not controlled, can “create problems with respect to capital solidity, liquidity, when not exactly insolvency”. In short, it is control and awareness that make the difference, but our country seems to be lacking precisely these. «Looking at the 2022 Edufin report on financial education – explains the teacher – we see how in the current year more and more Italians have spent more than their disposable income. Which means that either they have eroded savings, or they have spent by borrowing. And if we consider that young people on average have not saved anything, since their propensity to save is very low, since salaries in Italy are very low and there is consequently little possibility of saving, it evidently appears that the risk of debt is growing.

There is no need to make catastrophic scenarios, but to take advantage of the opportunity for a cultural change that focuses on financial education and savings. «We have to face paradigm shifts such as digitization, which does not stop and indeed proceeds at very rapid paces, without criminalizing behavior, but gearing up so as not to aggravate the situation. We need a financial education that doesn’t just mean learning the difference between simple interest and compound interest, but being aware of your income, your expenses, the sustainability of the debts you assume prospectively, and the need to save. It’s something we need to invest a lot in.”