PORT DICKSON: Low self-esteem and peer pressure are among the main factors that might drag youths into financial trouble at an early age.
Financial consultant Shamsuddin Abdul Kadir said most students tend to overspend to appear as equals with their peers despite being in a fragile financial position.
He highlighted several traits that could be detrimental to students with low financial literacy, including purchasing fake branded items.
"There are those who do not buy branded items and opt for fake ones.
"If they do this mainly because they were influenced by their friends who do have the original items, it is dangerous because the students may overspend for materialistic purposes.
"Problems will always arise if you are too afraid of what people will say or think about you," said Shamsuddin in an investment talk at Minggu Saham Amanah Malaysia 2022.
Besides spending on items based on brands, students may also fall into investment scams that entice this age group with financial returns that are too good to be true.
"Students need to be careful when they are in the early stages of investing.
"Do not believe advertisements that guarantee immediate wealth because, most of the time, those are just scams," he said.
He advised students to avoid getting into debt that would make them spend more in the long run.
Among such debts underscored by Shamsuddin were credit card debts, personal loans and car loans that would take more than five years to service.
He said those who need to purchase a car once they have secured a job should choose vehicles that can be fully paid for in five years.
Shamsuddin said "debts" that could turn into investments in the future include household loans, depending on the type of property, and unit trusts such as Amanah Saham Nasional Bhd (ASNB).
Meanwhile, Alaminda Healthcare Bhd founder Dr Hazli Zakaria said students would be tangled in financial stress if they were unaware of their own needs.
Many students may need to learn what's best for them at a young age and tend to work around other people's values instead of identifying their own.
"They may want what their friends have because they still do not know their identity, which would lead to stress.
"If we know ourselves better and are aware of our values and principles, we would not bother what others think of us.
"We will not waste our time worrying about this and will feel more joy," he said.
He added that parents also have a role to play in ensuring their children are not suffering in silence.
Hazli said it is common for youths and their parents to come into conflicts due to misunderstandings from both sides.
"Sometimes it is best for both parties to have empathy for each other and listen to what the other has to say before jumping to conclusions," added Hazli.