How To Deal With Debt!

More millennials are finding themselves stuck with unimaginable debt. Why is this happening and what can they do about it?

- Sasha Gonzales & Cheryl Chan

Certified financial planner Karen Tang has noticed that many millennials - people aged between 26 and 41 - are finding themselves deep in debt.

Many don't think twice about forking out money or taking out loans for luxury accessories, designer goods, expensive holidays, fancy cars, and so on. 'Buy Now, Pay Later', or BNPL has also become a way of life for them, and they're racking up massive debt on their credit cards, she says.

Of course, credit card debt isn't the only form of debt that many millennials have to deal with. Some also have hefty mortgages, medical bills or student loans to pay off.

According to a report in The Straits Times in August 2021, the average personal loan and overdraft balances for borrowers aged 21 to 29 years old shot up to $49,689 in the first quarter of 2021 - about 42 per cent higher than the average of $34,941 in the first quarter of 2020.

This is a big jump, and it's indicative of the issue, Karen says. The precise levels of debt, of course, vary from person to person. But one thing's for sure - there must be an effort to stop these figures from spiralling out of control, because getting deeper into debt is easier than reversing course to get out of it.

She adds, For starters, you may wish to refinance and get a lower interest rate for it. You can approach a bank for a debt consolidation plan - they'll try to get your personal debts under one plan and help you manage it.