Nov 4, 2022
Three ways Millennials can cut back on spending ahead of a potential recession
Equifax sees historically high levels of credit card spending
Many Bay Street experts such as Scotiabank Economics’ chief economist Jean-François Perrault have flagged they see a looming recession in 2023.
“I remember like it was yesterday, the Great Recession (in 2008), and that was very impactful on my finances and my adult life, and so I'm in preparation mode,” she said in an interview on Oct. 28.
Moorhouse said Canadians should start by implementing a spending detox to reset their financial habits.
“It's really just taking a look at where is your money going and can we hit pause on some things that are non-essential,” she said.
“That will allow you to free up some cash flow so you can maybe pad that emergency fund, pay off some of those really high interest debts that have been nagging you.”
She said now is a good time to implement this spending challenge, since there are two months left in the year and it would allow Canadians to start 2023 off on the right financial foot.
REDUCING SOCIAL MEDIA EXPOSURE
Moorhouse said while many people take breaks from social media for their wellbeing, it’s also good to cut back from online platforms for your financial health.
She said many individuals may feel inclined to buy clothing or housing decor after seeing influencers’ on social media, items that they wouldn’t usually spend money on.
“Maybe it's about muting them or unfollowing them temporarily until again, you feel a little bit better (financially),” Moorhouse said.
ADDING NOTIFICATIONS FOR CREDIT CARD PURCHASES
Moorhouse said Canadians should start paying closer attention to their credit card spending, if they aren't doing so already.
Earlier this week, a survey found the average Canadian’s credit card debt hit a record high in September.
Equifax Canada’s consumer survey released Tuesday, found respondents had an average $2,121 credit card balance.
Moorhouse said a good way to keep track of spending is by enabling notifications for your credit and debt cards. That way, you’ll be reminded with an email, text message or notification every time you spend money.
“It just gives you that moment to actually be kind of more conscious when you are shopping and just be a more conscious consumer,” Moorehouse said.