Millennial Debt: How to Break Up with it for GoodFeb 21, 2019
If you’re a millennial, debt may be an overwhelming problem that impacts the quality of your life and your wellbeing. Like the old song tells us, breaking up is hard to do, but when it comes to debt, the faster we say goodbye, the quicker we release the anxiety and find the lifestyle we want.
There are numerous reasons people might incur debt, but millennials often carry student loan debt, have lower paying jobs and higher living costs. And some millennials have trouble with overspending. (According to our Affordability Index, 43 per cent of millennials say they are guilty of spending more than they can afford.)
Credit cards don’t help. They’re so convenient, but it’s also easy to avoid paying them off in full each month, meaning debt keeps adding up (and rising interest rates put consumers at even more risk).
It’s a love/hate thing — a toxic relationship that has to be cut off at the root.
Here’s how you can ditch the debt for good.
Have an honest conversation
Maybe this conversation is just between you and your finances, or perhaps you can talk to someone you trust, like a friend or family member. If you need some professional assistance, you can even consider speaking to a credit counsellor or a Licensed Insolvency Trustee. The point is that you’re honest with yourself so you can develop a clear picture of what’s going on.
This thing between you and debt? It’s over.
You’ll need to collect data to understand how your money is coming in and going out. Gather all your financial statements, bills, income info, etc.
Think about using an app to track your spending, especially if you know overspending is a problem for you. It’s very easy to block out purchases and fool ourselves into thinking we’ve spent less than we really have.
Tell your credit card to move on already
If a credit card is one of the ways you’re increasing your debt, it’s time to see it for what it really is: a toxic relationship.
Consider breaking up with your credit card and sticking to cash for a set amount of time, or for most of your purchases. Cash is reliable, trustworthy and honest — the perfect partner for a great relationship.
To ensure you can make it from paycheque to paycheque, create a budget. If necessary, set cash aside for each spending category. When the money’s gone, stop making purchases until the next month.
Take that, debt.
Keep reminding debt that it’s no longer welcome
Create a plan for paying your debt down and stick to it.
There are lots of tools online to help you with this. Use our free debt management resources and look for blogs offering debt help and solutions.
Enjoy the feelings of accomplishment and peace of mind that come with every payment you make. What a relief to have debt leaving your life instead of being a constant headache!
Visit Club Thrifty to learn how one young couple paid off more than $100,000 of debt in just 33 months by setting monthly goals.
Bye, bye, debt.
Learn how to best manage your money
Financial literacy is a key life skill that most of us didn’t learn at school. Luckily, you’re hardwired to learn new things, no matter your age. Get curious about best practices when it comes to money management. Talk to people you know who are good with money. What do they do?
Read books and articles and, most importantly, implement the ideas you’re drawn to. As your financial literacy improves, you’ll forget that you were ever in a bad relationship with debt.
For a millennial, debt can seem like a given. But it’s not a relationship you’re bound to forever. It’s ok to say goodbye and move on to a rewarding relationship with money that benefits you.
What are you doing to boot debt from your life forever? Tell us on Twitter. #LeaveDebtBehind #RelationshipWithMoney #Millennials