Teens should ditch 'follow your dreams' advice - financial expert

Hannah McQueen says too many university students don't have a clear plan on how to use their expensive degree.
CHRIS MCKEEN / FAIRFAX NZ

Hannah McQueen says too many university students don't have a clear plan on how to use their expensive degree.

Too many young people are being told to follow their dreams and passions, and it could be disastrous, says a New Zealand financial adviser. 

Hannah McQueen says parents and career guidance counsellors pushing "passion for something" as a career choice answer are losing a key element.

"What's lost is the economic reality of that decision," says McQueen from Auckland, where she heads her financial advice business Enable Me.


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Should what jobs pay be a big factor in choosing a career and university degree?
Reuters

Should what jobs pay be a big factor in choosing a career and university degree?

McQueen says many 17 and 18-year-olds leaving school make career choices when their reference points are very narrow and they have no idea where the jobs that attract them can go. 

While researching her new book Pocket Money to Property, McQueen talked to school career counsellors, who admitted their default advice when faced with a student who didn't know what they wanted to do was to "follow a passion". 

McQueen says 17-year-olds can't really say what they are passionate about. They might know things they enjoy, but they have only been exposed to such a small area of life.

"Half the problem is a lot of people are mixing up hobbies with the professions and we should be honest about that instead of trying to romanticise about what the workplace is like."

McQueen interviewed year 12 and year 13 students for the book and the most common career choice was law, "or doing CSI stuff". Both options are based on the false representation of those careers on television.

"TV glamourises things, but they have no idea what the jobs are really like. You are about to incur a $55,000 student loan, are you sure you know what you are doing here?

Should what jobs pay be the main reason behind choosing a career?

Should what jobs pay be the main reason behind choosing a career?

"Kids are coming out three or four years later with a degree they don't really know what it means. They are not connected to an industry. If you don't have connections to transition from a degree to the work force, it is so hard to do that."

One year 13 girl told McQueen she was going to study performing arts at university. She said her parents wanted her to do something she was passionate about. Her career adviser reinforced this.

"I did some research [for her] and found it was very hard for performing artists to get jobs. In fact, for those who do get that degree, less than 50 per cent can work in that field and normally it is part-time for a community organisation. If you do get a job, you are probably looking at getting around $30,000. That's your maximum and there is no career path progression.

"If I was coaching her, I would say you can do that, but you need to work on other things because $30,000 a year is simply not OK."

McQueen says the future is even more bleak for the current generation. They face much tougher job and housing markets, and more change and dwindling support from the Government. They face getting no inheritance and paying much more for health and education.

"Back in the day, to become financially independent, you just needed to work hard, go to university, get a job, buy a house, pay off the mortgage and save for retirement. If you ticked all the boxes you could be fairly certain that you would work through the stages and be fine by the end," she says.

Owning a home will be very hard for the next generation if they don't get smart about making enough money.
123RF

Owning a home will be very hard for the next generation if they don't get smart about making enough money.

Now going to university does not mean you will get a job. Having a job doesn't mean you will progress. Having a high-paying job doesn't mean you will actually get ahead.

"Most young people won't buy a house until in their late-30s, if ever. That is if they have bothered to move out of their parents' home by then."

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McQueen says many teens are at university not knowing what they want to do or whether they should even be there. 

"They tend to end up getting a degree they are not really all that happy with and have incurred a student loan to realise they don't want to be in this field."

She knows of two students who trained to be doctors, and got to the end of training before they quit because they realised they didn't want to be doctors. They have $120,000 student loans and still haven't started something. "I'm thinking, who didn't pressure test this career choice because that sucks.

"When you are young, you have time to make mistakes. But at the moment the cost of not knowing that could be up to $100,000, which basically means you have set yourself up for a world of pain - if you haven't found your true vocation and it pays well.

"This isn't about pushing them into business. I think there is a huge place for arts and different things, but some of these jobs will pigeonhole them into limited earnings. That's OK, but they need to have a strategy so they are earning money somewhere else so they can have the full life they want.

"When you are earning minimum wage doing something you are passionate about; that passion dies pretty quickly."

Her advice for a teen unsure of what they want to do is to keep university as general as possible in the first year to build "some depth into their choice".

But mostly she believes children should be taught much more about the importance of earning money. 

"Doing something to pay the bills helps you do the things you love. If you don't have enough economic reality in these decisions, you will be unhappy. You will be stressed, you won't have options, you will never own a home and that stuff is what depresses people. Or you will work hard, but never get enough to progress."

Christchurch-based life coach Cathy Edwards says McQueen has a point about young people following passions and dreams to drive career choices.

"The problem is these things can change as people go through life. Your passions at one age might not be your passions at another age."

But Edwards says she's not all for following the money, either.

When choosing a job and career, she believes in picking something that is meaningful to you and you feel will make a difference.

"Even if the money is not excellent, doing something meaningful can help you be high satisfied with life and really motivated to work hard." 

* Financial advisor and author Hannah McQueen will join us for a live chat on Friday. Share your questions with her on stuff.co.nz from 12pm. 

 - Stuff

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