The rise of debts among young Australians is appalling and statistics suggest the number is increasing daily. Australians are availing loans which they can’t pay off in addition to the existing credit card bills and mortgages. The rise in debts might indicate that the youth are not educated enough. But it’s the contrary. The Gen Y is equally smart and educated as their counterparts in other countries. So why do they have debts which they can’t pay? Let’s find out.
Australia is world leader in personal debts
Australia has been voted as the number 1 country in terms of personal debts. Surprisingly, even U.S. is far behind Australia. Mortgages, credit card bills and big loans are the biggest reason for debts, according to data released by the Reserve Bank of Australia. Collectively the debts amount to more than $1 trillion AUD! That means an average of $56,000 for every adult Australian citizen.
Many first-time home buyers in Australia are availing the affordable home loans that offer low rates. This has lead them to live a life that wouldn’t have otherwise afforded. To make matters even worse, Australian youngsters have admitted they still use their credit cards despite the heavy debts. As the debts keep surmounting, the Gen Y keeps applying for more credit cards. The average credit card debts for Gen Y has been said to be almost $428,000.
One of the most important reasons for increasing debts is the dearth of jobs. Sure, the Gen Y is more educated and smarter than the previous generations, but there has been a steep decline in the number of jobs. Young Australians between the ages 18-26 are paying a considerable amount for their higher education but the degrees are not being converted into jobs. The reason for this could be the necessary skills that they need to acquire for jobs are not provided by the education system. The workforce is rapidly changing and in such an environment you need the proper skills and tools to get jobs.
The current connection between education and jobs paints a scary picture and many Australians are not even getting an undergraduate degree. They believe that it’s better to look for a job than spend a hefty amount on education which leads to nothing.
Young women in Australia are facing the age-old problem of gender gap and this has led to decreased pay for them. House markets have become tougher and rents have increased by more than 44 per cent. Australians feel that it’s better to take a house on loan than pay rent.