Millennials Defaulting on Their Debts at an Alarming Rate

It’s brutally obvious that the cost of living in most parts of Canada is skyrocketing. Homeownership is getting further and further out of reach for many Canadians, while rent and the basic necessities are costing more and more. Most Canadians find themselves affected by the changes to our expenses, but none more so than millennials. Young adults in their early twenties and late teens are defaulting on debt like never before… and the rate at which they are doing so increased over 11% since last year.

This trend is going to see millennials suffering from poor credit scores, cringe-worthy credit reports, an inability to purchase real estate, and most alarmingly, trouble saving for retirement. These youths appear to be headed in a direction that will see them struggle with debt their entire lives.

Student Debt

A huge culprit seems to be the heavy load student debt places on millennials. High tuition across Canada is causing young people just starting out, to do so deeply in the red. In the past, post-secondary education was seen as a way to get ahead, to work for more and save more. Now, it seems to be a huge setback for most.

Millennials Aren't Financially Savvy

It has also been suggested that perhaps this generation is a touch more ignorant when it comes to money matters, and spend when they really shouldn’t. The public school system is in the business of pumping out kids who had a two-hour brush with budgeting back in ninth grade and that is the grand total of knowledge these kids have about money. The education system needs to prioritize personal finance and begin at a young age. Every year, it should be a major component of what students in Canada learn about: how to save money for your future; how to pay your bills on time and how to prioritize your spending.

That’s not to say that parents are off the hook, either. Teaching your kids how to manage money should be as important to mom and dad as good nutrition. Especially since mom and dad are the first people kids turn to when they’re in dire straights. Teaching your kids about money is not just an investment in their future, but in yours, too.

Learn How to Manage Money

Living in the city is expensive in Canada and it’s not going to get any cheaper, but lots of us manage with mediocre paychecks. What millennials need is to learn how to manage their money and the best people to learn from are the pros. At Refresh Financial one of the most important things we do is educate our clients with our Financial Intelligence Training or F.I.T. - this is an exclusive knowledge base with easy to consume videos that is for clients only. When you become a client with Refresh, you don’t just greatly improve your credit score. You also fight the trends and become money-smart.

Why do you think millennials struggle with money? Let us know in the comments!