The' Shame Game' - Gen Ys And Millennials Stuck In A Cycle Of Credit Cards And Bad Debt
One of the top reasons stopping some Gen Ys and Millennials from entering the property market is that they are simply too ashamed of others knowing about their debt, according to Property and Finance Investment Expert, Ayda Shabanz.
“What I constantly see in this age bracket is a great deal of bad debt – that is, debt from multiple credit cards with high interest rates, and schemes like AfterPay where you can buy now and pay later,” she said.
“The scary part is the actual amount they are in debt. The credit cards will have limits of $20,000 or more, and ridiculously high interest rates. Of course, the items are not assets that will rise in value either, and these people are then are paying off one credit card with the other – sadly they are stuck in a credit cycle with no idea how to get out of it.”
Ms Shabanz has been helping Australia’s younger generations enter and invest in the property market since she started out in business, over 15 years ago. She said this credit cycle unfortunately never changes until the individuals reached out for help.
“So many of these people actually think they are too far gone to actually invest in property. They can only see themselves continuing in this credit cycle with no way out, let alone to actually buy a property,” she said.
“They are ashamed of their debt. They are stuck in this cycle and they feel they are the only ones. This is what’s stopping them from approaching an expert – they are ashamed.”
Ms Shabanz said that its no wonder they end up in this situation in the first place: because they are not educated on how to deal with their finances properly. At the same time, they have no chance of knowing how to turn their lives around either, without an expert’s help.
“At school, we learn the names of different rivers in Egypt, but not much practical guidance at all when it comes to managing our own personal finances. As a result, we have no trouble being approved for a credit card with a high interest rate, and even less trouble in spending it,” she said.
“So, what we have are credit cards with high interest rates, a lot of ‘stuff’ we don’t need and can’t afford, and a job that pays well but has no hope of helping us to swim. And when we are sinking, we are too ashamed to even ask for help, let alone consider investing in property.”
However, Ms Shabanz said the right expert is experienced in typing up the debt and putting their client on the right track for property investment.
“It is understandable they would be ashamed of their situation and feel like they are the only one in it. But that’s not true. There are just so many others. Having the courage to stand up and say you won’t accept this credit cycle any longer is the key. Then you can really start living!”
As Managing Director and co-Founder of Grow Consulting Group, Ms Shabanz said she has always been passionate about helping young people to learn how to take ownership of their cashflow and to ensure they have attractive financial options for their future. She is dedicated to showing Australians how to understand money, good debt and bad debt. She is committed to helping them to break free from a bad cycle and take control of their life.
“I was young when I started out too, so I get all the concerns they have. I want to show more people in this age bracket that property investing is indeed possible and not as complicated as they think,” Ms Shabanz said.
“I am very straight talking and talk to them at their own level, rather than condescendingly. I made some poor decisions of my own so I like to share these and show my clients a different way to achieving their goals, without having to make big differences in the lifestyle they have grown used to.”