Millennials seem to be struggling with debt and compared to previous generations have a different attitude towards finance. In the past few years there has been an increase in the amount of people declaring bankruptcy and defaulting on their loans. This rise has not been seen since the global financial crisis hit in the late 2000s.
There are many reasons why millennials are finding it tough financially:
1. Millennials rely heavily on technology which is great for researching and communicating but it also has its downfalls. Many unskilled job opportunities are being cut off due to the technology age which reduces the amount of jobs available. This has caused a dramatic increase in unemployment with youths. This increases the need to find cash fast through loans or credit cards to support their lifestyle and general living expenses.
2. Cost of living versus income is at an unfair tilt with the cost of living being higher than income. Many Australians are finding they need to work extra hours or second jobs to help maintain general living as well as being able to pay debts.
3. The spending nature and social activites of young people causes an increase in their need for funds and over spending with money they don’t have. Majority of millennials believe they cannot maintain their lifestyle without borrowing money and would happily commit to credit cards or loans even if they could not maintain the repayments. There are some funders out there who readily hand out these funds where the person can afford it or not which causes more debt to pile up.
4. With the house prices sky rocketing, the task of purchasing your first home can be a daunting a stressful thing. Majority of young Australians will struggle to purchase their first home even with the joint income of their partner. This will prevent young people from being able to set themselves up for the future.
Tips for keeping your finances in check:
• Get a copy of your credit file – understanding your credit file will help financially in the future as majority of lenders will look at this when approving finance.
• Research what can impact on your credit file, ie. Your credit score, credit enquires, pay day lenders, defaults etc.
• Don’t fall into the trap of getting quick money (payday lenders) as the interest in massive and it dramatically affects your credit file
• Have a budget and maintain it – this is the best way to maintain what you spend and know how much you can afford to spend on your social endeavours.
Millennials make up the biggest portion of our population and it is alarming to see where our future is heading. How will the next generation be able to survive financially if the current generation is struggling? Something needs to change or we will be doomed to just keep going downhill as a society.