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Surefire Ways to Help Your Millennial Find the Best Debt Options

As a parent of a young adult, it can be difficult to watch your child struggle to enter today’s housing market. Millennials are finding it increasing difficult to save for a mortgage down payment because of heavy debt loads and other affordability concerns. Should you offer to help even if that assistance takes a toll on your current finances or future retirement? Perhaps it’s time to offer them debt solutions that can help them get financially ready to purchase.

The truth is, almost all Canadian parents (96 per cent) are financially assisting their children between 18 and 35. And nearly half (48 per cent) are subsidizing their children well into their 30s (30-35 years old). According to the recent RBC survey, the average amount of parental support for their 30-35 year old children was $3,729 a year.

The millennial struggle is real

High housing prices, rising rents and the cost of post-secondary education are all part of the problem. A large part of the millennial generation is struggling to pay off debt and afford basic necessities. Many are living paycheque to paycheque while saving what they can in the hope that they can break into an increasingly out-of-reach housing market.

However, if your adult child is struggling to make ends meet as a renter, the struggle is only going to increase when they become a homeowner. If you’re a homeowner yourself, you know that comparing a monthly mortgage payment to rent only tells half the story. You also need to factor in home ownership expenses like insurance, taxes, maintenance and repairs.

Unfortunately, parents can’t compensate for all the financial woes of their children’s generation. Your help could be risking your own financial security. With fewer working years ahead of you, you have less time to replenish your retirement savings. And subsidizing your child isn’t really a viable, long-term answer. The good news: parents can direct their children to resources that can help.

How parents can help adult kids solve their debt problems

  • Implement best practices in financial management. Many millennials are already living frugally. But with challenging debt loads, living frugally might not be enough.

As your daughter or son faces ongoing financial challenges (like prolonged student loan debt payments) and changing financial obligations (like new vehicle payments or increased utility or rent costs), creating and adjusting a workable budget is a must. For many millennials, using technology can help. They can set up an app that will track spending. Encourage her or him to research blogs, Facebook groups, personal finance websites and Twitter to see how their peers adjust their spending and saving as their debt changes.

With the right tools in place, anyone can improve their financial situation.

  • Keep paying down debt. When debt repayment is a major and long-term goal, it can be a bit exhausting. Sometimes, people feel like they can’t see the light at the end of the tunnel, and their focus on their debt repayment can start to dwindle.

Remind your child to check in on their debt regularly to see where they’re at, by using an online debt calculator.

Seeing how much closer they are to being debt free than when they started (or when they checked in a month or two ago), or how they could reduce their debt (and the interest that goes with it) more quickly can be motivating. They may find themselves entertaining the idea of putting more money toward their debt.  Where will the extra money come from? Some ideas your millennial can consider are reducing costs, or taking on a side gig.

If your child is having trouble making those debt payments month after month, suggest they speak to a professional, like a Licensed Insolvency Trustee (LIT), who can offer suggestions and tools (or formal debt solutions) to help them.

  • Talk about balancing needs and wants. Many of us grew up without being able to separate our needs from our wants. No one wants to live without getting anything they want, but it’s even more uncomfortable to live with the financial consequences of always getting what you want.

Share blog posts like this one and help your child change their mindset when it comes to spending.

  • Talk about the pros and cons of owning a home. If you’re a homeowner, you can speak from experience. Yes, it’s nice to own your own home — it can provide a sense of security and freedom, and you have an asset you can sell down the road.


But that security and freedom can disappear quickly if you’re spending more than the recommended 35 per cent of your income on housing expenses. It can leave you scrambling to meet other financial obligations, and it can quickly lower your quality of life.

If your financial assistance has become one of your child’s debt solutions, it may be time for a change. Consider setting aside some time to discuss debt management strategies that they can implement on their own. In reality, your time and advice could end up being more valuable than any offer of money.

Are you looking for debt solutions for your millennial before they jump into home ownership? Tell us your story on Twitter. #LeaveDebtBehind #Housing #Parents

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