You feeling the squeeze?

Are you feeling the squeeze?

Chances are if you are between 25 and 45, you might be feeling a little pressure in your life.

From the high cost of living, to skyrocketing home prices, student debt that is higher than ever and pricey childcare – your generation pulled the short straw.

The GenSqueeze social phenomenon is getting attention for its impact on the 25-45 generation. 

This group of young adults is financially struggling – and not fairing well.

Now, a national non-profit has been built to lobby for younger Canadians and make sure governments take notice – they call themselves Generation Squeeze.

In many part of the country, especially B.C., home values have increased two to 10 times over recent decades – incomes have not.

The average couple is now bringing in nearly the same income one partner would have brought home in 1970s, all while having to pay for childcare so they can both work. And to get those jobs, Canadians are spending more than ever on post-secondary education – with the massive student loans to show for it.

GenSqueeze couples are taking many more years to achieve their dreams.

The average young adult now spends significantly longer in school, spends years longer saving for down payments. Financial independence and the concept of being debt free seem like a far off dream for many.

On top of that, according to the group, government spends $12,000 in benefits and services for each Canadian under 45, but more than $33,000 for those 65-plus. 

“Frustrated, the GenSqueeze demographic is feeling collectively like 'generation screwed,'” the lobby group says.

With that grim picture in mind, it's no wonder those under 45 are feeling squeezed.

“We are seeing that this group is really struggling today with securing financial independence and planning for their financial future,” says Donna Mihalcheon, senior vice-president and restructuring/professional bankruptcy trustee with BDO Canada Ltd. in Kelowna.  

“You are seeing this generation that has huge student loan debt in relation to what we had in the past, housing prices have significantly increased to a point that well outweighs the low interest rates, they want to start a family, there is huge unemployment rates, and it is really difficult.”

She says the average student is leaving post-secondary education with about $20,000 in debt – and often is unable repay it.

In February, the federal government was forced to write off almost $300 million in student loans from individuals who couldn’t pay, from more than 63,000 bad debts.

That leaves many feeling hopeless, but Mihalcheon says there is hope, and there are ways to change your financial future.

A common mistake Mihalcheon sees is young adults who have spent a lot of money on a post-secondary education they don’t use.

“You need to get an education in something that is going to get you a job,” says Mihalcheon. “They have a student loan in something they never use. They spent five years getting an education they never utilize. Make sure that whatever you go to school for will get you some employment at the end of the day.”

She says people are not thinking beyond this month, they're not planning for the long term, and they have to.

She also notices around Kelowna that no one keeps receipts, no one budgets, and they don’t realize what they are spending.

“You want to bury your head in your hands and wonder how to start from here?” says Mihalcheon. “Think twice before you buy the new car, before you buy the ATV, before you make that purchase. People need to sit down and make a plan, know what you can actually spend each month, and that will allow to start setting some money aside for savings.”

She recommends checking out online tools, including her own company’s website and the Canadian Mint's, that help you budget and plan for the future.

Mihalcheon says ‘GenSqueeze’ is also hurting their parents, the baby boomers. 

Although home values have increased in boomers' favour and they are, in general, better off financially; they are now using some of that accumulated wealth to help out their children.

“It is great you want help, and I think it is wonderful you want to help, but don’t help unless you are OK yourself,” warns Mihalcheon. “Whatever you do, don’t co-sign a loan for your son or daughter unless you are prepared to pay 100 per cent of it.”

As for Generation Squeeze, the group is asking Canadians to help fight back.

They want a better generation deal, one that gives all generations a chance.

“A Canada that works for all generations, where all Canadians have the chance to live up to their potential, enough time and money to enjoy life, and are working together to leave our country and planet better off than we found it.”

Read more about Generation Squeeze and its mission here.