For Those Affected by Generation Squeeze, Appearances Can Be DeceivingMay 26, 2015
Despite increasing levels of household debt, it’s not all bad news. Housing prices are climbing and increasing the value of Canadian’s personal assets, the unemployment rate in Canada has remained steady at 6.8 per cent and more and more Canadians are attending post-secondary education and attaining higher levels of education. Appearances, however, can often be deceiving. In fact, for many Canadians under the age of 45, affected by ‘Generation Squeeze’, things aren’t quite as rosy.
Generation Squeeze is the new term being used to describe the financial pressures unique to the under 45 crowd, such as poor job opportunities, lack of pension, and heavy student debt loads. Although other generations, such as the Baby Boomer generation, may be reaping the benefits of rising housing prices and low unemployment, for younger Canadians, this isn’t necessarily the case. Here are some of the realities of Generation Squeeze:
Reality: Home ownership is a goal that many younger Canadians may have to put on hold, partially due to two factors: the need to repay student debts and the increasing costs of buying a home. As housing prices continue to rise, many Millennials are being priced out of the market. Instead of becoming first time home buyers, university graduates and young adults are renting or moving back in with Mom and Dad. Others who have purchased a home likely did so with help from their parents. Living with parents may enable this generation to save for a down payment on a house or delay gratification until student loan repayments have been made. Those who thought they could manage a mortgage may also be struggling to make ends meet as a result of high mortgage payments.
Reality: More education often means more debt. Younger Canadians are more educated than ever before, but they also likely had to borrow quite a bit of money in order to achieve this. With the average University student now graduating with approximately $28, 000 in student loan debts, many young Canadians are starting out with a heavy debt load, which can be a huge financial challenge.
Reality: The fact that the unemployment rate in Canada has remained low is a good sign. The quality of employment available is another story. Full-time permanent employment is often hard to find and many younger Canadians are resorting to working multiple part-time or contract positions, despite their investment in post-secondary education. Stagnate wages are another issue. Despite the rising costs of living, salaries have failed to keep pace.
Struggling with a range of financial challenges not experienced by previous generations, many who are affected by GenSqueeze are resorting to increasing their personal debt in order to manage. For many, this means that debt has become overwhelming and likely a source of stress and anxiety.
To lessen the stress, as well as the financial squeeze, focusing on minimizing and making debt more manageable is a good plan. If you are feeling financially ‘maxed out’, it can be difficult to know where to begin, but there are a number of debt options that can help. Debt consolidation, filing a consumer proposal or, as a last resort, filing for bankruptcy are some options to deal with debt. It may not be clear which one is best for you, so a good first step is to speak to a debt relief professional such as a trustee, particularly if you are considering formal debt options. A trustee in bankruptcy will sit down with you and review your situation, and then help you determine what debt solution is the best individual choice for you.
Don’t be fooled by appearances – younger Canadians are facing many challenges that have them feeling financially overwhelmed and stressed out about debt. So let’s discuss debt. There are many options that can help reduce stress, debt and lessen the squeeze. Get to know your debt options, make a plan and take control of your debt.