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Tuesday, May 28, 2024

Teens tote designer bags as debt soars

One in 10 teenagers in Norway has an expensive designer handbag that they’ve received as a gift from affluent parents, reported newspaper Dagens Næringsliv (DN) on Thursday. One economist claimed many Norwegians still have “a lot of money, and feel they need to use it,” while a separate report shows an alarming rise in credit card debt among youth.

Business has been booming at the Louis Vuitton shop in downtown Oslo. PHOTO:
Louis Vuitton opened a shop in downtown Oslo a few years ago, and apparently has attracted quite a lot of customers. PHOTO:

Many Norwegian youth have grown up with designer clothes and accessories, and think that’s common, wrote DN. Tove Marie Engstrøm, age 16, was cited as among those who tote bags that cost tens of thousands of kroner, relating how she received a Louis Vuitton bag from her parents for her birthday and also has a Mulberry bag she uses at school.

Anita Borch, a researcher at the state institute for consumer research (SIFO), told DN that 10 percent of parents surveyed said their daughters had designer products. She urged more debate on how Norwegians spend their wealth, and cautioned against falling victim to consumer pressure.

Red-hot credit cards
Meanwhile, news bureau NTB reported Thursday that young Norwegians aged 18 to 26 currently account for around NOK 1 billion (USD 130 million) in credit card debt. Both the Red Cross and Norway’s largest bank, DNB, have formed an unusual partnership, calling for more instruction about managing finances before consumer debt gets out of hand.

“The debt built up by young Norwegians is getting alarmingly high,” Trond Bentestuen of DNB told NTB. “Those who get into deep credit card debt can risk never being able to buy a home.” Their parents shouldn’t be relied upon to bail them out, financiers agree, even though many parents in Norway now help finance home purchases for their grown children because of the country’s high housing prices.

DNB and the Red Cross have developed a new educational program for children in the fifth grade that teaches the basics of income and consumption. Around 65 schools have adopted the program, to teach students how to manage money. The program stresses the importance of saving (currently also at a low point in Norway), how interest rates work and the dangers of buying consumer goods on credit.

Not learning it at home
Both DNB and the Red Cross are urging schools to put money management on their academic agendas, because Norwegian parents often fail to teach children the basics of it themselves. Studies show that only 26 percent of Norwegian households, for example, maintain a budget and that consumer debt in Norway overall has hit NOK 70 billion.

“We like to think that parents have the main responsibility for teaching their children about private economy,” Asne Havnelid, secretary general of the Norwegian Red Cross, told NTB. “Unfortunately we see that many children don’t get any guidance at home, and that economic challenges can be inherited.”

That’s why DNB and the Red Cross think the schools can be “an important arena” for teaching the basics of money management. “We hope more schools will join in,” Bentestuen told NTB. Berglund



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