To be a millennial in Canada right now is to be in debt. Despite the rise of side hustle culture, Proof Point, a 2023 study from RBC, found that millennials are more indebted than ever, with debt-carrying Canadians between the ages of 35 and 44 saddled with a debt-to-disposable income ratio of 250 per cent, as of 2019. (A sharp increase from Canadians of the same age in 1999, whose debt-income ratio sat around 150 per cent).
For those under the age of 35, the stats aren’t much better, with indebted Canadians in this demo carrying debt that makes up 165 per cent of their income. And according to a 2024 study from Consumer Plus, demand for new credit is significantly higher among younger generations. Blame it on the longstanding impact of the COVID-19 pandemic, the current untenable housing market, or a plethora of other factors; generationally, young Canadians have it pretty tough.
In spite of this dismal prediction, young Canadians across the country are working hard to tackle their debt in a variety of unique ways, and coming out on top. We spoke with two Canadians in their twenties about how they’re managing debt.
“An intervention from my friends inspired me to get serious about my student debt repayment”
Age: 27
Occupation: Occupational Therapist
Location: Ottawa, Ont.
Debt amount: $121,432.75 in student debt between OSAP and bank loans
Salary: $70,000
Monthly Payments: A minimum of $1,300
“When I graduated with my Masters Degree from Queen’s in 2021, I started off with exactly $121,432.75 of student debt. I had about $57,000 in bank loans and $64,432 in OSAP payments.
“ “When I first started repaying my loans, the number was just so big that I felt discouraged from trying to bring it down. It was such a large, abstract number, [and] I ended up with really bad anxiety about it. I would think: If I die, then I wouldn’t have any debt to pay
“When I started my current job, where I wasn’t an independent contractor anymore and had a more stable income, I fell into another toxic mindset: I decided to not care. I would just pay the minimum amount and not think about it.
“When I started getting benefits at work, which isn’t common for occupational therapists, I started visiting an RMT and physio to help with a back injury I had. When I got the reimbursements in my account, I treated it like free money and would buy things with it. Come credit card payment day, I would freak out and not be able to pay it—leading to around $3,000 in unpaid credit card bills. Eventually, I drained my entire savings account (around $3k) to pay off my credit card.
“At that point, a couple of my friends sat me down for an intervention. They’d watched me struggle with money for years and they forced me to take out a calculator and work out a plan to pay off my debt. One of my friends pointed out that, if I continued to just pay the minimum, I’d end up paying about $30,000 in interest—that really snapped me out of it and forced me to focus.
“During that intervention, we did the calculations together and worked on a budget. I settled on paying around $1,300 monthly to pay off my bank loans, and I decided to continue to just pay the minimum for my OSAP for the time being because there’s considerably less interest on those. To help keep me on track, I use an app called EveryDollar. The app allows me to give every dollar I receive a “job”—so moving every single dollar into categories like “debt payment” and “groceries,” for example.
“ It makes me appreciate money a lot more; I used to spend $20 and think, whatever, I can make that money again. But that’s not true when you have so much debt to pay.
“My goal now is to pay off all my debt by 2026. Then, I want to set up an emergency savings fund. I also want to max out my RRSP and TFSA to save for retirement and save on taxes. Sticking to a strict budget, and having an end goal in mind, has really reduced the amount of anxiety I felt around money. I’ve reached a point now where I’m meeting my debt goals and loving my life.” — Grace Manalili
“Sharing my debt experience on TikTok helped me get out of bankruptcy and educate others on personal finance”
Age: 29
Occupation: TikTok Content Creator
Location: Halifax, N.S.
Debt amount: $35,158
Salary: A little more than $60,000
Monthly payments: Variable
“I’ve had debt my whole adult life. Growing up, my mom had multiple sclerosis, a disease that takes away your ability to move. She stopped working when I was eight or nine years old and I never had role models when it came to finances.
“I got my first credit card when I was 19, and they just kept increasing the limits. Eventually, I had one card with a $15,000 limit, another card with a $2,500 limit and one with a $7,500 limit. Over the years, I accumulated consumer debt. It wasn’t like I was going out a lot or buying designer things, it was just going out for dinner with friends and being social. I was living with my partner and, when we broke up, my bills doubled and I had to re-furnish the apartment. I spent a ton of money at that time with the intention of paying it all back, but it got out of hand very, very quickly.
“One day, at work I was acting very out of character. My manager pulled me aside and I explained my entire situation. She told me that I needed to go talk to a trustee and declare bankruptcy. I hadn’t known that was an option.
“So in 2018, I declared bankruptcy for my $25,000 worth of credit card debt. It was my first bankruptcy, and I was only in it for nine or 10 months, but I was paying $180 every month to have that debt wiped. Of course, there are a lot of limitations of filing for bankruptcy; it ruined my credit score, for example. It still impacts me: like when I tried to get a new car and the interest rates were much higher than if I didn’t have a bankruptcy on my record—I am in no way promoting filing for bankruptcy.
“In the ensuing years, I accumulated some new credit card debt (which came from paying for car repairs), but I also needed to make EI repayments (I went on sick leave and was overpaid), student loans, taxes and my car payment which I had from before my bankruptcy.
“ I found that when I started to talk more openly about debt and bankruptcy, it was easier to tell people ‘no, that’s not in the budget right now’ and focus on paying off the debt.
“Last October, I decided to get serious. I started posting on TikTok about my bankruptcy and sharing what I’ve learned on my personal finance journey. I worked with a ‘zero dollar’ budget—meaning that every dollar has a place to go. So, I have a spending debit card which is a separate banking account where I put all my money for groceries, gas, fun, miscellaneous. And when that account is empty, I can’t spend anymore. It’s better than having a normal chequing account where there’s a few thousand dollars and all your expenses, including bills, go through that account. It can get confusing and you think you have more money than you do to spend.
“Today, my minimum payments are around $700—but I also put any money I make from brand deals on TikTok towards my debt. It can be anywhere from $100 to $1,000 extra a month. Initially, I wanted to be debt-free by the time I’m 30, but that’s in just four or so months. So, the next best thing is as soon as possible. My estimated pay-off date is December 2027, which seems so far away. But when you have almost $30,000 in debt, it’s more realistic.” — Erin Spencer
