Recent stats don’t paint a pretty picture for millennials with dreams of owning homes and living debt-free.
According to a recent survey, 76 per cent of youth aged 16 to 25 believe they have a better financial future than their parents. What’s more, 81 per cent of them expect to own a home and 53 per cent plan on retiring at age 60. The problem is that many don’t have a realistic plan for meeting these expectations. This is especially problematic given the financial obstacles many of them face.
The financial obstacles of millennials
The vast majority of millennials enter the job market saddled with student debt, and this is one of the main obstacles standing between them and their financial goals. Canadians owe over $28 billion in student debt, and difficulty with paying back student loans is common.
It’s estimated that 43 per cent of young adults have had to borrow money from their parents to cover basic necessities. While this doesn’t mean reaching their goals is impossible, it does suggest it’ll be more difficult than many of them seem to believe.
Tackling student debt
Paying down student debt is possible, but it requires discipline and planning. Prioritizing loans with the highest interest rates and making a budget are the most important steps, but the fact is many millennials aren’t familiar with the realities of managing debt while working towards long-term goals. To learn more about tackling student debt post-graduation, you can read the resources available on our student debt page.
Learning how to prioritize
The financial aspirations of millennials may reflect a lack of understanding of what’s really required to build a comfortable retirement. The only real way to build a stable financial future is to start saving and stick to it.
The importance of good financial habits
According to the survey, while 51 per cent of young adults have some amount of debt, only 3 per cent of them would use an unexpected influx of capital to pay it down. This suggests that millennials don’t have the experience to ensure they can fulfill their long-term objectives.
The most effective saving strategy is to start small and to make a commitment. For instance, setting up an automatic savings withdrawal for $5 a day is often more effective than trying to remember to put $150 in a savings account every month. Making a good decision once is easier than making many good decisions.
Don’t Procrastinate--Tackle Your Debt Head On!
Achieving long-term financial goals requires a clear understanding of one’s financial situation, which should always start by outlining a clear plan for managing debt. D&A MacLeod Company provides credit counselling and student debt help. Don't hesitate to Contact us today to set up a free appointment and take your first step towards the financial future you deserve.