[Issue Interview] "The State Must Support Youth Asset Building... Mentors Are Needed"

Jung Unyoung, Chairman of the Finance and Happiness Network
Encountering Youth Financial Issues Through Meetings with Self-Reliant Youth
"Many Young People Have Overcome Challenges Through One-on-One Mentoring"
Young People Who Experience Investment Failures Become Reclusive
Loss of Dynamism Leads to National Losses
"Basic Finance" Needed to Ensure a Minimum Standard of Living

"Young people who fail to manage their financial lives properly from the beginning continue to accumulate debt. As they become credit delinquents, they end up staying at home and becoming reclusive. When young people lose their dynamism, society as a whole suffers significant losses."

Jung Unyoung, Chairman of the Finance and Happiness Network (Geumhaengnet), who conducted the first study in Korea on the relationship between young people's financial competency and happiness, stated that the state must take responsibility to ensure that young people are able to properly manage their financial lives, including asset building. To achieve this, he emphasized that "basic finance," which guarantees at least a minimum level of financial services, should be introduced to young people as a priority, and that mentors are needed to guide them in making sound financial decisions.

Geumhaengnet and the youth policy platform "Yeolgodakki" jointly conducted a survey on "Youth Financial Competency and Financial Happiness" in March. The scale used in this survey was developed for the first time by Geumhaengnet. It was tailored to the realities of Korean youth finance, referencing financial literacy questions from the Organisation for Economic Co-operation and Development (OECD), and this was its first actual use in a survey. This was also Korea's first empirical study to analyze whether financial competency actually affects financial happiness (subjective satisfaction with one's financial state). Geumhaengnet is a nonprofit corporation officially approved by the Financial Services Commission, established in 2016 with the goal of making finance a foundation for a humane life rather than simply a pursuit of profit. Its roles include designing future-oriented and preventive financial education programs, developing financial counseling platforms, and making policy recommendations.

Chairman Jung explained that he developed this scale while creating a platform for young people. In 2022, he collaborated with Crepass Solution, Korea's first licensed alternative credit rating agency, to launch a financial platform for youth. He developed the youth financial competency scale with the idea that young people could use the platform to foster their own growth and receive financial education naturally. Observing that countries like the United States and the United Kingdom have introduced concepts such as financial well-being or financial wellness to measure satisfaction with financial life, he said, "I determined that Korea also needs to develop indicators to measure the level of happiness people feel in their financial lives and to identify the factors that influence it."

Jung Unyoung, Chairman of the Finance and Happiness Network.

He realized the national importance of youth finance after meeting self-reliant young people. These are young people who have been under protection in care facilities or foster homes and whose protection has ended. Chairman Jung said, "Even last weekend, I met with self-reliant youth, and they had many concerns, such as how to manage their spending habits, how to manage their assets in order to build wealth, and which financial products to choose among the many available." He added that mentors who can help them are essential.

Chairman Jung explained that this mentoring system goes beyond simple financial advice and provides guidance on all aspects of life. To date, Geumhaengnet has supported 900 self-reliant young people in asset building and employment, and provided one-on-one mentoring to 100 of them. Each young person is paired with a dedicated mentor who not only shares knowledge about all aspects of financial life but also discusses employment and career issues?a "convergent" mentoring approach. Chairman Jung said, "Financial life is intertwined with personal issues such as psychological and relationship problems, so mentoring inevitably becomes convergent as well."

In addition, they are taking a meticulous approach to working with young people. Chairman Jung noted that self-reliant youth tend to be wary of society and adults. He gave an example: "I've seen cases where, when these young people first leave the facility and try to live independently, parents who had been living apart approach them to live together, targeting the settlement funds they receive." To open the "doors of their hearts," the same mentor observes and supports them closely for a year.

Chairman Jung said that, based on his direct experience, young people find it difficult to manage their financial lives properly. For example, they struggle with managing expenses within their income range and often invest based on stories of others' successes rather than sound principles. Such habits lead to high-risk investments, such as in virtual assets, and when many young people fall into debt and become reclusive, society as a whole loses its dynamism and the national economy suffers losses.

Chairman Jung argued that in order to address this, the concept of "basic finance"?a minimum level of financial services that everyone should be guaranteed to lead a humane life?must be introduced to young people as a priority. This includes receiving at least minimal financial support from the public sector, as well as financial education in areas such as expense management, asset management, credit management, and proper investment methods. He particularly emphasized the need for "financial humanities" education, which helps young people understand the meaning of money. He said, "A major problem young people face is making financial decisions without any sense of values or goals, such as what money means to them." He stressed, "Through basic humanities education about money, young people should acquire financial knowledge and develop a structure in which they act according to their values."