Millennials: How is Debt Impacting Your Life Milestones?Oct 14, 2018
Is debt blocking you from realizing your goals?
Are you actively delaying significant milestones because you can’t afford them?
Our new poll shows that debt and affordability challenges may be keeping millennials from their desired financial future. We found that one-third of millennials are even feeling overwhelmed by their debt and unsure of what to do.
What’s debt got to do with it?
Results of our poll, summarized in the BDO Canada Affordability Index, reveal how unaffordable daily life is for many Canadians.
83 per cent of Canadians with a lot of debt are unprepared for unexpected costs.
75 per cent of Canadians who are not homeowners, say they aren’t likely to buy a home in the next five years.
Three-quarters of Canadians are putting off paying credit card debt, buying a car, purchasing a home or pursuing further education due to lack of affordability.
Economic factors such as cost, location and income have a lot to do with affordability. However, paying off a high debt load can definitely impede your ability to afford essentials and make it harder to reach your goals. And, according to credit monitoring agency TransUnion, millennials and Generation Z are taking on debt faster than other demographics.
What to do about debt
You may not be able to sway housing prices, but you can choose to deal with your debt, which can ultimately help you meet more goals. Here are some tips:
- Too many high-interest credit cards or loans? Combine them onto a lower interest credit card or line of credit and pay it down with any extra money. Alternatively, you can speak to your bank lender about a consolidation loan. Upon approval, your debts will be combined into an affordable monthly payment.
Check out the Financial Consumer Agency of Canada website for a simple tutorial on debt consolidation.
- Increase your income, add to savings. Squash your debt balances quicker by taking on a side-gig or contract work. Just be careful not to take on more expenses when your income goes up. It’s also important to make sure you’re adding to your emergency savings while paying down debt to save you from relying on credit for any future unexpected expenses.
- Get social. There are thousands of resources online to motivate you. Instead of using social media to feed your FOMO, use it to inspire you on your financial journey. Start by checking out Jessica Moorhouse’s Mo’ Money Podcast — she dives deep into personal finance topics like student debt, early retirement, side gigs and mindful spending.
- Use a budget. You may not have learned how to balance a budget in school, but they’re one of the most valuable tools to keep tabs on your money. You can download a budgeting app like com or Wally. Or, you can jot your budget down on a worksheet and keep it visible. Your budget shouldn’t feel too restrictive, but it can help you make better choices about spending, saving and paying off debt.
Use this guide to see what a balanced budget might look like.
- Talk to a pro. Are you overcome by student debt, car loan and/or credit card debt? If you’re finding it hard to get on top of all your debts, speak to a Licensed Insolvency Trustee (LIT) An LIT will lay out all the debt relief options available to you, based on your individual needs.
You can also use this debt calculator to see your options, based on your current debts.
Don’t let debt define you! Put in a strong push before the end of the year to pay off debt and don’t forget to keep setting goals. Make use of online resources and financial bloggers to keep you motivated and allow yourself enough time to make changes and reap the benefits.