The author, Lawrence Dale, analyzes the ways in which Canada's youth are increasingly relying on finance-related debt such as credit cards, car loans, and mortgages in order to finance their lifestyles and lifestyles of their parents. He goes on to explain the consequences of this kind of debt, such as high interest rates, potential bankruptcy, and long-term negative effects on financial health. Dale also provides insight into the attitudes of Canadians towards mortgage debt, citing a survey which revealed that a large majority of young adults were more concerned about having money for lifestyle expenses than they were about worrying about their future financial wellbeing.
The article highlights several negative aspects of relying on debt to finance current expenses. It mentions the long-term implications for personal financial health, emphasizing the danger of over-leveraging ourselves into debt. It also points to the risk of becoming high-risk borrowers, with interest rates increasing substantially for those who have too much debt. Furthermore, it brings up the possibility for bankruptcy due to unmanageable debt if lenders are not able to collect.
The article provides some suggestions on how to approach debt more responsibly. It suggests that young adults develop an understanding of their own financial situation before making commitments such as mortgages or car loans. It recommends that they speak with financial advisors to get a better idea of what their options are, as well as taking on no more debt than they can handle. Finally, Dale recommends that young adults consider long-term investments such as RRSPs rather than focusing exclusively on short-term goals such as vacations or luxury products.
The article ultimately concludes that young people need to be better informed about their financial circumstances before acting on their impulses to finance flashy items or lifestyles. It is clear from this article that debt can be just as damaging to our future financial health as it can beneficial in the present. By taking on too much debt and not understanding the implications, Canadians may be setting themselves up for failure down the road. As such, it is important for young people to be aware of their own financial situation and take the necessary steps to ensure that any debt taken on is manageable, so that they may enjoy peace of mind in the future.
This article was contributed on Nov 14, 2023