Let’s Talk About Debt, Baby: How Millennials Are Doing It RightFeb 14, 2018
By now, you might be used to seeing headlines about millennials “destroying” things. Whether it’s beer, diamonds or bar soap, people born in the 80s and 90s could probably do without them. But one area where millennials are killing it (as opposed to destroying it) is personal finance and debt. Consider these recent statistics:
- 1 in 6 millennials have saved $100K or more for retirement
- 67 per cent of millennials who have a savings goal stick to it
- Millennials improved their credit score by four points and shaved 8 per cent off their debt loads last year
Most importantly, when it comes to debt, millennials aren’t afraid to talk about it. In our Debt Confessions survey, we found that millennials were the generation most likely to talk about debt with their partner early in their relationship—50 per cent discussed it within the first six months. This is much better than baby boomers, one-quarter of whom haven’t told their partner about their debt at all. So much for father knows best!
What can baby boomers learn from millennials?
- Be open and honest about your finances. Hiding financial secrets can hurt a relationship, but 47 per cent of Canadians with a lot of debt are hiding some of their spending habits from their partner. In this case, what they don’t know can hurt them. Consider the worst-case scenario of this Australian woman who was harassed by debt collectors after her financially abusive ex-husband filed for bankruptcy.
- Talk about money early and often in your relationship. Even if you keep separate accounts, you’ll want to keep your partner in the loop. Set up a monthly financial date night, where you go over your spending and budget together (and maybe watch some Netflix afterwards?).
- Create a plan to pay off debt. Telling each other about your debt is great, but then you need to make plans to start reducing it. Crunch the numbers in our debt repayment options calculator to find out how much you might have to pay each month as you explore your debt options.
This student debt stat is completely bonkers!
While many millennials seem to be following some financial best practices, they also appear to be less forgiving of their partner’s student debt. A new U.S. survey asking about debt and compatibility revealed that 80 per cent of millennials find it unacceptable for a partner to have student debt. This is particularly shocking in the States, where student debt loads can easily exceed $50,000, and take several years to pay off.
Even in Canada, we found that many graduates are still paying off student loans well into their 30s. It seems millennials might need to be more tolerant…when it comes to their partner’s debt load.
Did any of these stats surprise you? Join the conversation on Twitter using the hashtags #DebtConfessions or #LoveAndMoney