Gen Xers Carrying Too Much Debt, says recent survey
Not that this will come as a surprise to most people, but it was revealed in a recent survey by the Investors Group that Gen Xers (Canadians aged 30 – 45) are grappling with higher mortgages and more credit card debt that their parents’ generation.
It seems Gen Xers, with their higher income potential, post-secondary education and lack of pension plan investments, are buying more and saving less. And racking up major credit card debt and mortgage debt in the process.
The study quotes Tom Moran of Investor’s Group as saying “you want to own the house, you don’t want the house to own you.”
How can Gen Xers solve this problem?
- First, pay down the credit card debt as soon as possible.
- Secondly, begin putting funds aside in a RRSP for retirement.
- Third, pay down the mortgage debt.
The end result will be no high interest rate debt accumulating (i.e. credit cards and department store cards), an asset that you fully own (your house) and retirement funds in the bank to fall back on once you reach retirement age.
It’s never too late to start this process but it’s always better to initiate it as early in life as possible. That’s why 30 – 45 year olds are in a dangerous position. They’re not that far away from retirement and they’re accumulating too much debt along the way.