Millennials in Vancouver concerned about possible recession

As the Bank of Canada raises interest rates again, millennials are raising concerns about the possibility of a recession.

But experts in Vancouver explain that there are steps people can take to help prepare for the added financial burden.

Credit card debt, student loans, and property ownership — are a few challenges that many in the generation face.

In a recent Angus Reid survey for Coast Capital, it says 85 per cent of people surveyed in B.C. aged 35 to 54 are stressed by the overall cost of living.

Jordan Damiani, the senior wealth advisor for Meridian Credit Union, says one way to prepare is by checking in with the bank before interest rates increase.

“Call your financial institution and say, ‘Okay, what would my payment be if…,’ and one of the recommendations would be, start making that payment today. If you make it today, it’ll just pay down more principal, but the reality is…when that rate goes up, you’re prepared, and you’re not really on the edge of what you can afford at that point,” he said.

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Damiani says millennials, people born in the early 80s to late 90s, are often part of a wider misconception about the generation.

He explains that the perception of a millennial is an, “[18 or 19 year old] living in their parents’ basement — and it’s not.”

“These are people that are really getting into their peak earning years,” he said.

In reality, Kris Moan, the branch manager at Coast Capital Savings says, “We’re talking about folks in their 30s or early 40s, they still have upwards of [10, 20, or 30] years before retirement is going to be looming,” he said.

Moan says a key aspect of planning is taking a look at how much money you’re spending, and going from there.

The survey also notes that more than one-in-three people surveyed rate their current financial stress level as “high” or “very high.”

“Laying out a plan to see what they need to maybe adjust or make changes to, whether it’s spending habits, or how they drive their income. Perhaps looking at how to bring in side-pieces to their income, or side-hustles, as some of the millennials call it,” Moan said.

Cutting costs

Damiani adds it could help to take a look at where the money is going, and seeing what can be cut — like eating at restaurants, streaming services, or food deliveries.

“I actually just had this conversation the other day, where the individual said, ‘Yeah, I’m spending a lot of money on Door Dash and Uber Eats,’ and we just talked about that. You’re paying a premium for the delivery service, a huge premium. So, is that something that is sustainable? Especially, if your budget is going to be a little tight potentially heading into a recession,” he explained.

The survey adds that British Columbians are already cutting costs, with many buying less groceries and postponing buying big purchases.

One person told CityNews they aren’t eating out as often, with another saying they cut costs by not having a car.

Damiani says, “You want to focus on the things you can control. We can’t control the economic cycle, but we can certainly control our behaviour, and our preparation.”

Moan says restructuring debt management is also something that can help.

“If you are carrying student loans, or high interest credit cards, there’s probably better solutions out there, depending on your circumstance,” he expalined.

“Don’t suffer in silence,” Damiani said. “If you’re going through some difficulties, and you’re finding, ‘geez, I’m really stressed that I can’t make this payment,’ just reach out. Your financial institution wants to hear from you. The myth is that banks or credit unions want people to default. They don’t.”

But both financial advisors say there could be some benefits to being a millennial during these times.

“It’s expected that housing is going to continue to decline in the coming quarters. So I think for millennials that have been squeezed out of the housing market, maybe they can find the right time to jump in,” Damiani said.

Moan adds that there is still time for things to change.

“Millennials have a lot of time on their hands still. So when you’re talking about investing and retirement planning, these ups and downs in the market and the continued volatility, as it’s called, can really actually be to their benefit in the long run,” he said.