An estimated 700,000 Austrians are over-indebted, with adolescents and young adults being increasingly affected.
A decline in income, unemployment, illness, and personal hardship, as well as accepted sureties and failed self-employment are common reasons for over-indebtedness. According to the 2021 Debt Report, 24.7% of Austrian debt counselling services clients are 30 years old or younger. This means that they have already accumulated so much debt at a young age that they have difficulties repaying their arrears. The third most common reason why young people end up in this situation is irrational consumer behaviour. Many of them have low education levels: 46.6% of those surveyed in 2020 had “only” completed compulsory schooling, while 5.2% had graduated from secondary education. The situation is similar when it comes to income, with almost one third of young clients (31.8%) having earned less than the living wage of 996 euros a month in 2020. Median income stood at 1,200 euros. 43.1% did not have a job. Average debt in this group was around 32,000 euros during the first year of the coronavirus pandemic.
“Understanding the interrelationships of economics and finance can make a significant difference in how you cope with problems and surprises in life.”
What can we do?
Economic and financial education must be given more attention in school curricula.
Economic and financial education must be given more attention in school curricula. We have therefore joined forces with a group of partners across society to found Austria’s central platform for anchoring economic education in schools: the Foundation for Economic Literacy. The foundation describes its programme comprehensively: “We raise awareness for broad-based, responsible economic education and encourage school administrators and teachers to help us implement it. We provide curricula, lessons and teaching materials that teach economic, financial and future skills in the simplest, most playful, inspiring and application-oriented way possible. We support teachers in teaching economic, financial and future skills in a concise and exciting way. We finance measures that enable schools to establish a thematic and didactic focus on economics. We enhance pupils’ knowledge and competencies by teaching them future skills – especially discourse skills; long-term, critical, and solution-oriented thinking; as well as cooperation skills, participation, mutual responsibility, self-reflection, creativity, learning techniques, and time and knowledge management.”
Why are we doing this?
We all should be able to make informed and viable financial decisions in our daily lives.
Economic and financial literacy is a key skill and should therefore be a main feature of education in the twenty-first century. The economy should be taught as a system that can be shaped and changed, embedded in society, the environment and democracy. With its activities, the Foundation for Economic Literacy aims to empower all young people in Austria to participate maturely, critically, independently, responsibly and competently in sustainably developing and shaping the economy and society in the course of their lives and in their various roles in the economic world (as employees, entrepreneurs, citizens, consumers, insured persons, taxpayers, etc.).
Location: Stiftung für Wirtschaftsbildung, TSH Collab, Am Tabor 36, 1020 Vienna, Austria
Partners: Chamber of Labour, ERSTE Foundation, the Federation of Austrian Industries, the Innovation Foundation for Education, the MEGA Foundation for Education, the Central Bank of Austria, and the Austrian Economic Chambers