Sat, Oct 26, 2013 - Page 5 News List

Young workers racking up debt

HIGH-RISK:One in four young office workers said their income was not enough to cover their living expenses, meaning they have no emergency funds for loss of income

By Gan Chih-chi and Jason Pan  /  Staff reporter, with staff writer

Nearly half of young office workers are carrying debts from house mortgages, credit cards or university loans, according to a recent survey by yes123 job bank.

Up to 57 percent have less than NT$100,000 (US$3,400) in savings, with 10 percent having no savings at all and 25 percent saying their wage is insufficient to cover their monthly living expenses.

The survey was conducted among people in their 20s who entered the workforce within the past five years mostly at entry-level or junior executive jobs, and placing more emphasis on their own quality of living compared with older generations.

Overall, average savings stood at a NT$229,257, with 11.1 percent having over NT$1 million in savings.

For long-term planning, the survey found the average savings target set for retirement was NT$22.12 million. To reach this nest-egg target, 55 percent say they would seek investment management.

For investment planning, 51.6 percent rely on fixed bank deposits or current deposits, with those investing in insurance at 48.6 percent, followed by mutual funds at 42.3 percent and holding stocks at 38.1 percent.

Of the nearly 50 percent of respondents who are in debt, 40 percent are carrying house mortgages, 25 percent have college or university education loans, with the rest owing on credit cards and other financial or bank loans.

“Most office workers think about managing money only in terms of ‘subtracting expenses from income,’ but this concept should be modified,” yes123 public relations official Yang Chung-bin (楊宗斌) said. “It should be based on ‘subtracting savings or investment from income.’ Investment planning should be done by forcing oneself to make investment planning or regular saving.”

“Putting NT$2,000 or NT$3,000 each month into an investment is the lowest basic investment required, and it can be used for mutual funds or a gold certificate,” Yang was quoted as saying on the Cnyes Web site.

The survey also found young office workers understand the concept of utilizing bank savings or investment as emergency funds, in case of loss of income, with 15.6 percent of them saying they have the financial resources to last one month and 12 percent saying they can get by for three months.

However, 11.3 percent of the surveyed are in the “high-risk group,” as they have no savings, saying that they could not last even one day in the case of loss of income.

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