Teens and debt: some facts

The level of debt amongst teenagers is alarming governments. Legal aid centres are reporting of teenagers coming to them with debts of hundreds of hundreds of dollars, and in some cases, thousands. The wide availability of credit is partly contributing to those debts, but mobile phone debt is consistently cited as the principal culprit.

Personal impact

It’s important to recognise that debt can have serious implications. Failure to repay will result in you gaining a bad credit rating – which can affect your ability to borrow for several years. That’s why awareness of debt traps and debt management are vital skills.

Downshifting

Contrary to Australia’s upward borrowing trend, social researchers have identified another much smaller trend called ‘downshifting’. Downshifters are individuals who change their lifestyle and aspirations to reduce their debt and expenses. For example, they may move to a smaller home or a more affordable location, and lower their inessential spending on items such as entertainment or eating out.

Downshifting is really just a fancy modern word for becoming thrifty. Even when you’re young with few commitments, it can serve you well to develop a thrifty mentality. Think about what inessential expenses of your own you could downshift.

Learn more about the implications of personal debt and your credit rating. Or, read about mobiles and debt.