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News   April 19, 2024   by Adam Malik

How inflation is affecting younger consumers

In the face of inflationary pressures, Gen Z and younger Millennials are taking proactive steps to maintain financial stability, according to the 2024 Consumer Debt Report from the Credit Counselling Society (CCS).

The agency noted that these age groups are showing resilience by adapting their financial strategies amidst challenging economic conditions.

The survey, which involved participants from the Angus Reid Forum, revealed that 50 per cent of Canadians aged 18-54 have sold personal items or consider it a significant possibility due to financial pressures. Furthermore, 19 per cent of 18 to 34-year-olds have moved back with parents or relatives because of rising interest rates and inflation, with another 21 per cent seeing it as a likely option. Additionally, 20 per cent in this age bracket have taken on second jobs or side gigs, with 42 per cent contemplating the same move.

Alarmingly, 54 per cent of individuals between 18 and 34 years old have incurred more debt to stay financially afloat. Among Canadians who reported an improvement in their financial situation, 49 per cent attributed it to spending less on non-essential items. On the flip side, 85 per cent of those feeling financially worse off cited increased expenditure on essentials, with 47 per cent noting a rise in debt and 38 per cent mentioning emergency expenses as factors.

Peta Wales, president and CEO of CCS, highlighted the continuous decrease in Canadians’ confidence in their financial situation for the third consecutive year, emphasizing the hardships of taking on more debt or using savings to manage current expenses. Over the past year, Canadians have supplemented their income by accessing savings (56 per cent) and borrowing from credit cards (44 per cent).

The report also sheds light on the psychological impact of financial stress, with 36 per cent of Canadians feeling anxious about their financial situation, marking a consistent increase since 2020. The stigma around debt remains, with 70 per cent of low-income Canadians and 50 per cent of 18 to 34-year-olds with non-mortgage debt feeling embarrassed and hopeless.

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