Generation Y (people aged under about 30 years of age) are likely to have more problems paying off debts than young people have had in the past. An increase in part time work and a fall in hours worked means they have less means to repay debt.
Often, a young person’s first debts today are likely to be ‘perpetual debts‘ such as credit cards and HECS, whereas in the past a young person’s first debt was more likely to be a fixed repayment schedule loan such as a car loan.
Being in perpetual debt is no longer something that many people think should be avoided.
"I don't think Gen Y has really had a great deal of experience in managing money and finances, or in establishing good savings practices," says KPMG demographer Bernard Salt.
"I am really quite concerned about their ability to manage all of this."
We recommend that you should have a plan to bring debt under control and debts with higher interest rates, such as credit cards, should be paid off first. If you require assistance with managing your debt, budgeting or need a debt consolidation loan, speak to one of the financial planners at Intellichoice. Please feel free to use our free budgeting calculator on the Intellichoice website for help managing your finances.
