Two Types Of Credit That Young People Are Drawn To - Refresh Financial

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Two Types Of Credit That Young People Are Drawn To

 Two Types Of Credit That Young People Are Drawn To

In Canada, the average consumer debt is rising. On average, we now owe a massive $22,000, not including our mortgages. We're seeing that young people are taking on more debt than the older crowd and it's not all credit card debt. There are two types of credit that young people are drawn to. It's accounting for the increase in debt amongst young Canadians.

Car loans

- More and more Canadians appear to be financing their vehicles. Debt owed to car loans has risen 6.6% over the last year.

Installment loans

- Cash loans are another major area of growth for Canadians and their debt.

What these numbers tend to indicate is that Canadians, especially the younger generations, are living well outside of their means. The low-interest rates and a high cost of living seem to be a draw when it comes to accumulating more debt. If you want to avoid being a part of this statistic, the following advice is tried and true.

1. Live Within Your Means

- Ensure the amount of money you’re spending each month does not exceed the amount of money you’re earning.

2. Budget

- Give yourself spending limits and stick to them.

3. Monitor Your Money

- Look at where your cash is going and check your statements regularly to stay on top of things.

4. Save Your Money

- Preparing for the unexpected expenses of life is how smart people stay in the black.

5. Pay Down Your Debts

- The longer you take to pay down your debts, the more it’s going to cost you. Don’t spend more on your credit than you have to!

These are not complicated steps to take, although it’s never easy to alter your lifestyle. It's well worth it though if what you get in return is financial stability.

Do you think Canadians are taking on too much consumer debt? Let us know in the comments!

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