Debt Ballooning for Younger Canadians: A Growing Concern

Debt Ballooning for Younger Canadians Amidst Rising Costs and Interest Rates

Inflation, housing costs, and interest rates are causing debt to balloon for many younger Canadians, according to experts in the field. Scott Terrio, the manager of consumer insolvency at Hoyes, Michalos Licensed Insolvency Trustees, has noticed a significant increase in debt among his clients aged 18 to 29. The average credit card debt for this group has risen by 34.5% from 2022 to 2023, with cases averaging over $12,000.

Similarly, Jeffrey Schwartz, the executive director of Consolidated Credit Counseling Services of Canada Inc., has observed a 27% increase in debt loads for clients under 40 from Q1 2023 to Q1 2024. With stagnant incomes, rising interest rates, and the pressure to keep up with social media-driven spending habits, younger Canadians are finding it increasingly challenging to manage their finances.

Experts advise tracking spending diligently, building up emergency funds, and living within monthly cash flow to avoid falling into serious debt. Short-term austerity plans and strict budgeting can help individuals make significant strides in debt repayment. It is crucial to resist the temptation of high-interest loans and to keep credit limits low to prevent spiraling debt.

Ultimately, the goal is to take control of one’s financial situation and avoid being at the mercy of banks and creditors. By making informed decisions and prioritizing debt repayment, younger Canadians can work towards financial stability and independence.