Recent studies have revealed that Generation Y – also known as the millennial generation – are increasingly feeling that, unlike their parents’ generations, they will not be able to achieve such material goals as finding their dream job or buying a house, and will not be retiring until much later in their lives.
Whilst many may believe that personal debt is an issue which only presents itself later in life, many millennials are experiencing the foundations of a long battle with personal debt early on in their lives. Repaying student loan debt has become increasingly difficult for many who are struggling with unemployment or low paying jobs, with studies also revealing that some ex-students are still affected by the repayment of their tertiary fees twenty years later.
When it comes to getting yourself out of the spiral of personal debt, an evaluation of your spending habits is a necessity, and students are no exception to the rule.
Some of the most damaging financial habits leading millennials into early experiences with personal debt include:
- The ‘need’ to stay up to date with the latest technologies, clothing trends etc. As a result, millennials are creating a planned obsolesce for their purchases, perceiving a functioning item as ‘inadequate’ after a more recent model is released.
- Excessive credit card spending. Statistics show that 50% of millennials are using their credit card to purchase basic necessities such as food. This heavy reliance on credit raises great concern for future encounters with personal debt.
- Not paying their outstanding bills on time. Over 25% have had late payments or are dealing with bill collectors of some sort.
- Reliance on financial assistance. Young Australians should learn to minimise the level of economic aid granted by parents and friends to improve their financial independence and avoid developing bad personal debt habits.
If you’re a millennial, or you have a child or friend who falls within the age bracket and is notorious for any of the aforementioned financial habits, it is important they seek guidance and rectify their financial affairs now, so that they can steer clear of uncontrollable levels of personal debt in the future.
For formal personal debt assistance, or for more information on personal debt and the solutions available, Insolvency Services Australia is here to help. Give our toll-free 24/7 hotline a call today on 1800 003 883.