It’s not easy being a young person in Canada. Not only are Millennials trying to get their careers started while looking for the perfect someone to spend their life with, they are also suffering from debt stress.
A recent report from BMO found that young Canadians in the 18-34 age range are suffering from debt stress at a much greater rate than other age groups.
Debt Stress by Age
|Debt has caused me to:||18-34 years old||National Average|
|Miss out on activities (trips, social gatherings, etc.)||66%||51%|
|Think about debt multiple times a day||56%||39%|
|Lose sleep from stress||50%||38%|
|Borrow money from friends/family to help manage debt||51%||31%|
|Feel ashamed about debt||50%||37%|
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, says financial stress can lead to other problems –
“Stress can lead to everything from arguments with your loved ones to health problems,” says Schwartz. “It’s unfortunate that young people are bearing these burdens as they try to start their lives. But it’s just another example of how debt can ruin lives – regardless of how old you are.”
One of the keys to debt avoidance is proper budgeting. This is a point that Tony Tintinalli, Regional Vice-President of BMO Bank of Montreal, stresses:
“Developing and following a realistic budget that includes both monthly expenses and leisure spending can help reduce stress and identify areas where spending can be scaled back,” says Tintinalli.
Consolidated Credit has compiled the following tips to help Millennials cope with their financial stress –
- Identify – Before you a fix a problem, you need to understand it. The first step on your way to debt freedom is figuring out the true extent of your problem. Calculate all of your outstanding debts, their interest rates and what you are currently doing to pay them off. These figures will be an important tool as you start to fix your financial troubles.
- Goal setting – Now that you know where your finances stand, you need to start setting some goals. It’s useful to use short, attainable goals to lead you towards the ultimate goal of becoming debt free. Start by committing to saving a little bit of money every day or every week. Every short-term goal you reach will have the same effect as removing a few stones from a mountain – but in your case, it’s a mountain of debt.
- Planning – Goals are great to have but you also need a plan to reach them. Making a budget can give you a clear roadmap on your journey to debt freedom. But, a budget is not something you look at once and forget about. It needs to be referred to regularly to help you stay on track. Start charting all of your income and expenses and make sure you are following along.
- Take no prisoners – Saving money needs to become a part of your everyday life. Be ruthless with your saving and don’t cheat. It’s not easy but it’s doable. Get the entire family involved so you can challenge each other to save more. It may seem difficult but the reward of becoming debt free will feel so good that you will be happy you sacrificed to reach it.
If you want to learn more about making responsible financial decisions, check out Consolidated Credit’s free Personal Finance educational section. If you’re struggling with debt, call one of our trained counsellors today at 1-888-294-3130 for a free debt analysis.