Thursday, 21 April 2016

The Greatest Financial Challenge Facing My Generation: Technology

by Theo Rogers

The problems that my generation are going to face are going to be much greater compared to today’s problems. For example:

Technology: It will become much more advanced, which will allow hackers a greater opportunity to try and access peoples accounts and access their money. So when you use a contactless card to pay for an item under £30, you place your card onto or hover it over the machine which allows you to pay for the item (you don’t have to put in your PIN). There must be a transaction happening which is sending out Bluetooth type signals. As technology is advancing, imagine if the transaction could be intercepted and changed by a nearby hacker using readily available technology so that the money is transferred to the wrong account. Not only can you do this with a card, you can also pay contactless with your phone and even your watch. Barclays use a method called ping-it which allows you to transfer money to your friends. All your friends need is to be signed up to the ping-it method. This type of technology may not be far away as the same principle can be used in car theft. So when you lock your car with the wireless key fob a signal is sent to the car to lock it and to show this the lights flash, but now someone could stand at the end of the street with a blank car key and all they have to do is push their button and it stops the signal from reaching that car. Whilst they do this the signal information on the actual owners key is then copied onto to key of the potential car thief. So the problem is that technology could be helping people to steal your money. Lastly as the technology improves, people will need to adapt to it and like anything some people just don’t like change. In conclusion by improving technology in transferring money and for paying for items, hackers get a better opportunity in getting hold of your money and personal information.

Economy: If the economy starts to inflate, prices on items will increase. Meaning that people will start to find it harder to buy basic items, so people’s money now has a lower value. The main utilities people need are water, electricity and gas. So if these people are unable to light the homes and keep them warm, this will lower their standard of living. Transport is also key to people’s lives. If they are unable to get to work, they could be sacked because public transport and fuel costs will increase. This means they will not be able to afford to get to work. Without a job the household income will dramatically decrease. Also the ever rising cost of food means people are spending more in the shops, rather than spending their money on different things. E.g.  Household bills.

House Prices Increase: House prices are still rising. This means that my generation in the future is going to need a larger deposit to buy a house. So the bigger the house price increase, a larger deposit is required which will take a longer period of time to save up for. Now you have paid the deposit, the bank or building society will offer you a mortgage, dependent on your income. So the bigger the mortgage, the more you are in debt, I believe that to help my generation the time period to pay off your mortgage should increase from the standard 25 years to up to 40 years, due to this ever increasing house prices. This again will make it harder to buy basic needs as you have to pay for the mortgage, your health could get worse as you are constantly thinking about the mortgage (becoming stressed) and if you don’t pay the mortgage in time, the bank can repossess your home. People will become homeless; this will increase in that country which will lower the GDP.

Education that we receive now: Not every school teaches money management, and not everyone will take business studies at GCSE, so many young adults are going to enter life with completely no experience in how to look after their money, what type of bank account to put their money in and what is most important to buy. Not only will young adults not know how to look after themselves then (money wise), they want be preparing for the future for their pensions. Once they have finished secondary school education, many young adults would like to go to university. University fees and other living costs, such as housing, are likely to rise, meaning that many people won’t be able to afford university at all. The lucky few that do make it to university are most likely going to have to take out enormous amounts of money in the form of student loans. Which means many young adults will be starting out in life with large debts. Most likely only the few who gain the very well paid jobs will be able to pay off these debts. These debts will impact on their future ability to save a house deposit, pay a mortgage and or rent.

Conclusion: As I have shown in this article, the financial future for my generation is going to be challenging compared to today’s and past generations.

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