Millennials and their debt
Even though the average entry-level salary and minimum wage have increased over generations, many studies have shown that Millennials are accumulating more debt than previous generations. According to 2019 Statistics Canada data, Millennials have become the most indebted group of society.
Understanding this debt can be tricky. From a general opinion, the racking up of that debt can seem confusing. Despite the fact that the general cost of living is higher, median salaries have also seen increase. It is when comparing numbers that the gap between the cost of life and the average income is noticeable. One of the best ways to analyze it is by comparing real estate prices. The increases are not proportional. In fact, according to Statistics Canada’s numbers, the median mortgage debt for young millennials is 218,000$ which is 2.5 times their median after-tax income. To put it in perspective, when baby boomers were that age, their median mortgage debt stood at 67,800$, which equaled that generation’s median after-tax income.
Although Millennials are the most educated generation and have an overall better income, this generation can’t seem to catch a financial break when trying to catch-up to previous generations’ milestones.