How to Avoid Consumer Debt? Try the Minimalist LifestyleOct 20, 2017
Are you a university or college student spending beyond your budget? Depending on credit cards? If you already have student loan debt, your overall debt load could become a real burden after graduation. Before consumer debt takes over your life, consider the rewards of adopting a minimalist lifestyle.
A BDO poll recently asked Canadian grads under 40 who graduated with student debt just how much they still owe. Six out of 10 still owe over $16,000. And when asked about their biggest student debt regrets, 25 per cent wish they hadn’t added to their debt load with credit card debt and vehicle loans.
Adopting a minimalist lifestyle has many rewards
There’s a lot that’s been said about minimalism in the last decade. For many people, having fewer possessions not only declutters their physical space, it also simplifies their life and their finances.
For students or soon-to-be grads, the biggest benefit of a minimalist lifestyle might be reducing or avoiding debt.
Let’s look at minimalist spending in its simplest terms: less spending can mean more money. More money could mean less debt (or more savings).
You’re likely face a lot of financial challenges when you graduate.
- The job market is challenging. New graduates often have to think outside the old baby boomer box and get creative about making money. BDO found that almost 25 per cent of Canadian grads under 40 have worked outside their chosen field to reduce their student debt.
- The housing market isn’t the friendliest of places. High rent and huge mortgages are untenable for graduates who have lower incomes and a lot of student and consumer debt. Four in 10 grads under 40 delayed their home purchase because of their student debt load.
- Health care costs, insurance, and transportation costs further stretch budgets.
Maximizing your savings and minimizing your spending could result in personal and financial benefits that help offset the difficulties that arise post-graduation.
Consumer debt is not a minimalist’s friend
One of rewards of adopting a minimalist lifestyle could be less dependency on credit cards.
Outstanding credit card balances that come with 18 or 19 per cent interest charges can quickly result in an overwhelming debt load. Especially if you’re only able to make minimum payments.
Since minimalists spend less and own fewer possessions, there’s a good chance that you won’t need your credit card quite as often. As a student, this is a useful habit to adopt early on.
If you’re graduating soon, you’ll have enough challenges ahead of you —overwhelming consumer debt doesn’t necessarily need to be one of them. Adopting a minimalist lifestyle is a great strategy for reducing your spending and avoiding debt.