Debt Repayment and Planning are Key for 20-somethings’ Finances, Planners Say
For the 20 something graduates stepping into low-paying jobs after years of studying and racking up debt, a little fun and celebratory purchase may feel like a well-deserved treat.
But financial planners warn against getting too carried away, and suggest that with an average school debt level of $28,000, people in that demographic turn their attention to getting back on a solid financial footing as quickly as possible.
Even though the government often allows you a six-month window after you finish school to start paying back student loans, interest on some loans starts ticking the minute you finish your studies. Those rates will vary in different provinces, but most average at least five per cent. It is important to start paying back these loans as soon as possible.
A survey by TD Canada Trust released last month of 6014 Canadians age 18 years and older found 34 per cent of the Gen Y struggle to save in the face of challenges such as high education costs, low salaries, high debt loads and temptation to shop beyond their means.
Setting a budget and financial goals are key to allowing saving and debt reduction to happen at the same time. This gives people more freedom to choose how they want to spend their money.
Experts agree it all comes down to planning ahead, to maintain some control of your circumstances.
This blog is based on an article written by Romina Maurino from the Wednesday August 7th 2013 edition of the Kitchener Record written.
Ask me how we can set up a financial plan for you that covers all your money coming in, and going out.
Financial Security Advisor
Life Insurance Broker
WP: (519) 648-9580
FX: (519) 489-2740
244 Woolwich St. South, Unit #1 ~ P.O. Box 261 Breslau, ON ~ N0B 1M0