A new survey by the Bank of Montreal (BMO) found that debt is creating stress and a loss of sleep among all age demographics. Perhaps diminishing health will lead to consumers shrinking their enormous debt levels.
Here are some of the findings from the study:
First, the survey discovered that the household debt is $73,305 for millennials, those who are more likely to have student loans, and $92,476 for Canadians aged 35 to 54, those who are more likely to have a mortgage.
More than half (56 percent) of millennials reported feeling anxious about their high levels of debt, which causes them to think about it several times throughout the day, and another half say they lose sleep over it. Furthermore, half feel ashamed, argue about it with friends and family and borrow money to pay for their household debt.
Older adult Canadians, meanwhile, conceded to more debt but less torment. For instance, 39 percent admitted to feeling ashamed over their debt, while between 38 and 41 percent reported thinking about their debt multiple days each day, arguing about it and losing sleep over it.
Spending habits
David Coletto, chief executive officer of Abacus Data, told the Toronto Star that millennials have very different spending patterns than their older counterparts. Rather than spending money on a car or insurance a millennial’s significant monthly expense will be their smartphone and data plan. Also, millennials are likely to spend more money on well-known brands and clothing.
Of course, student loan debt remains a big issue for Canadian millennials.
“If the student’s loan is being repaid through the National Student Loan Service Centre any monies paid while still in school are applied directly to the principal,” said Michael Krieger, assistant vice president and trustee in bankruptcy for BDO Canada Limited. “The smallest changes to reduce spending, in order to make payments on their loan, can have a huge impact on their debt load after graduation. Plus, it brings milestones such as a down payment on a house or car closer into reach.”
With enormous debt loads, it’s contributing to a millennial’s inability to “grow up.” This means that individuals in their 20s and early 30s are unable to accumulate assets, such as retirement savings, investments or precious metals, or even saving enough to purchase a home or a vehicle.
In the meantime, the average Canadian will carry just under $20,000 in debt this year with a goal of seven years to pay it off.
The BMO online survey was conducted with 1,002 adult Canadians between Jun. 30 and Jul. 3. It contains a margin of error of +/- 3.1 percentage points.
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