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First FOMO, now GenSqueeze – what do these acronyms mean for our financial stability and debt?

It seems like a new dictionary is being developed. New terms, phrases and acronyms are popping up with what seems like alarming frequency. For example, I was recently interviewed on a local news broadcast about FOMO. What is FOMO?  FOMO is the Fear Of Missing Out, and it is influencing the financial stability of many Millennials, Boomers and Seniors. Due to FOMO, more and more Canadians are spending (and sometimes ramping up their debt) just to have items or experiences that others in their peer groups have.

Another term has recently crept into our lexicon: GenSqueeze.  What does that mean?!  High home prices, student debt, lower paying jobs, lack of pensions, and less government assistance for under 45 year olds are all contributing to those in their 20s, 30s and 40s feeling squeezed for money, time and opportunity. Unfortunately, like FOMO, GenSqueeze is also adding to our debt.

GenSqueeze is impacting Canadians in a number of ways, none of which are positive.  The under 45 crowd is feeling the squeeze when they go to buy their first home. It’s more difficult these days to buy a home because house prices are soaring but incomes are not. Most Boomers and Seniors saw a significant increase in their net worth as a result of increasing home prices.  The Millennial generation and Generation X will likely not realize those same gains.  More Millennials are living in their parents’ homes for longer to pay off debt and try to gain some financial stability. Then, when they do attempt to enter the real estate market, over 40 per cent of young people are looking to their parents for help in buying their first home. Once young families have purchased their homes, they’re faced with historically high debt levels. Due to all the financial challenges of GenSqueeze, Millennials are increasingly putting off monumentally important life decisions such as when to have children. This is serious! 

Will the younger generation ever become debt free? I was speaking with a senior over the weekend and he said to me “Bruce, do you know how everyone says that they want to be younger?  I don’t.  I wouldn’t want to be starting over.  There is so much competition for everything, housing prices are unaffordable, it’s almost unaffordable to operate a car, I’m happy to be the age that I am.”  I hadn’t even considered GenSqueeze prior to that conversation, but he described it perfectly.  We are living in a rapidly changing world.  Consider this blog. You would not have been reading a blog online 10 or 15 years ago.  You would have more likely been reading a newspaper or magazine.

What can we do to ease GenSqueeze and its negative effects, like too much debt?  I think that we need to start by getting back to back to basics. Work with a budget. There are great budgeting tools and mobile money management apps available online. I talked about FOMO at the beginning of this blog. Take a step back from FOMO.  How can you do that?  Don’t rush into purchases.  Think about what you really want and what you can really afford.  If you’re in debt, look at your debt options.  Work on recovering from debt and building some savings. 

Lastly, if you’ve tried to control your spending and tackle your debt on your own and you’re still not able to get ahead, seek the help of a debt relief professional. A trustee can review your circumstances and better explain debt options such as consumer proposals and the bankruptcy process.  The time to start is now.  The sooner you begin, the faster you will be on the road to financial health and easing the negative effects of GenSqueeze.

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