{"id":28909,"date":"2026-03-06T23:35:32","date_gmt":"2026-03-06T23:35:32","guid":{"rendered":"https:\/\/thefundingpoints.com\/?p=28909"},"modified":"2026-03-06T23:35:32","modified_gmt":"2026-03-06T23:35:32","slug":"how-to-deal-with-debt-in-your-20s-in-2026","status":"publish","type":"post","link":"https:\/\/thefundingpoints.com\/?p=28909","title":{"rendered":"How to Deal With Debt in Your 20s in 2026"},"content":{"rendered":"
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Get to Work \u2013 As Much as You Can<\/h2>\n

Did you know almost half of Canada\u2019s post-secondary students take on student loan debt? And then pay for additional, nice-to-have lifestyle expenses on their credit cards?<\/p>\n

Tackle your debts by getting a job \u2013 this could be a part-time job, working a handful of hours each week around your school schedule, taking a job on campus, or you may decide to spend your summer months working a full-time job. You\u2019ll have extra cash flow to pay debts and to help with your day-to-day expenses.<\/p>\n

While it might be hard to chip away at your student loan debts during your studies, working will help keep your debts and student loans as small as possible. The idea is to leave school with as little debt as possible.<\/p>\n

You can also work smart by researching scholarships, bursaries, and other awards available to you. Non-repayable funding, like grants, bursaries, and scholarships, are a great way to offset expenses tied to your education.<\/p>\n

How to Pay for College or University Without Getting Into Major Debt<\/p>\n

Budget \u2013 And Don\u2019t Get Into More Debt<\/h2>\n

Your 20s are a time to learn to live within your means. Most young adults don\u2019t have the pressure of paying for mortgages and daycare expenses, but you may be tempted by brand new condo rentals, flashy cars, new electronics, and luxury trips.<\/p>\n

Get into the habit of budgeting. What is your monthly income and what are your typical monthly expenses? For a month, track your daily expenses, including your trips to the pub, your groceries, and your online shopping. You may learn you\u2019re spending over $200 a month on discretionary expenses \u2013 or \u201cwants\u201d instead of \u201cneeds\u201d \u2013 like your morning coffee runs or meal deliveries.<\/p>\n

What Are Your Bad Habits Really Costing You?<\/p>\n

Create a budget by writing down your monthly income and your fixed expenses, including your rent, bills, and transportation costs. Then, attribute some of your income towards your discretionary spending, such as eating out, entertainment, and shopping. You need to also carve out some of your income to put towards savings and debt payments.<\/p>\n

Your budget should balance so that your income is enough to cover your fixed costs, debt payments, discretionary purchases, and the money you\u2019re putting into savings. Test out your budget to make sure it fits into your lifestyle.<\/p>\n

You may need to cut costs to balance your budget. That could mean getting roommates to split the rent, picking up more hours at work, or selling your car to take the bus to work.<\/p>\n

How to Break the Paycheque to Paycheque Cycle<\/span><\/span><\/p>\n

Build Up an Emergency Savings Fund \u2013 And Then Some<\/h2>\n

Saving money can be tricky in your 20s when you have so many competing priorities. Your first pot of savings should be dedicated to an emergency savings fund, a small but invaluable bit of money you can turn to when you\u2019re in a pinch. Typically, your emergency savings should cover three to six months of living expenses.<\/p>\n

This may be a big sum to save up, so start small. Begin with an attainable goal of $500 to $1,000 and attribute about 10 percent of your income each month towards your rainy day fund. To simplify the process, automate your savings so the cash is moved over each time you get paid. You can do this through your online banking with a recurring transfer.<\/p>\n

Don\u2019t be discouraged when you need to pull cash from this fund. Whether you\u2019re in between jobs, your car breaks down, or you need to take a summer school course, your savings are used for these emergency situations.<\/p>\n

Avoid an Unexpected Financial Crisis and What to Do If Disaster Strikes<\/p>\n

Save for Retirement<\/h2>\n

It sounds unrealistic to think about retirement when you\u2019re just getting started with your career, but there\u2019s power in compound interest. Sock away as much as you can \u2013 as little as $10 to $20 a month into your retirement fund yielding a high interest rate and watch that pot of money grow as interest accumulates. The longer your money is invested, the more time it has to compound and grow.<\/p>\n

If you\u2019re working full-time, it\u2019s worth looking into your company-provided retirement savings plan. Many companies will match your contribution to a certain percentage, so it\u2019s worth taking advantage of that benefit. For example, if they have a matching plan of 4 percent, they will add 4 percent to the 4 percent you put into your retirement savings. That\u2019s essentially getting a 100 percent return on your investment, before you start earning any interest. Don\u2019t miss out if your employer offers this!<\/p>\n

Paying Down Debt Is a Bigger Deal Than You Might Think!<\/p>\n

Have Patience and Stay Focused<\/h2>\n

In an era of Instagram influencers and instant gratification, Canadians in their 20s are inundated with the newest fashion, high end real estate, and trendy restaurants. Try not to get swept up in things you can\u2019t afford \u2013 and the habit of turning to debt to get your hands on them. Using credit cards and lines of credit is a dangerous game to play in your 20s because you could be setting yourself up for a lifetime of debt repayments, a low credit score, or worse.
Remember, your 20s are for ramen noodles and roommates \u2013 and that\u2019s not a bad thing! As your income increases, don\u2019t fall into the trap of lifestyle inflation, using your extra cash flow and bonuses to upgrade your lifestyle.<\/p>\n

Decide on why you\u2019re scrimping and saving: is it to pay off student loans a year after graduation, to have a down payment for a home by 25 or to travel the world during a gap year? Figure out what your inspiration is and it\u2019ll keep you focused.<\/p>\n

Almost Free from Credit Card Debt? 6 Things to Do to Stay Out of Debt<\/p>\n

Get Professional Help With Your Debts If You Need It<\/h3>\n

If you\u2019re in your 20s and wading in missed payments and overdue debts, get professional help to regain control of your finances. We are a non-profit organization teaching Canadians from all walks of life more about how to manage their finances and deal with their debts. We can do the same for you.<\/p>\n

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\u00a0<\/p>\n

Last Updated on March 6, 2026 <\/span><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Get to Work \u2013 As Much as You Can Did you know almost half of Canada\u2019s post-secondary students take on student loan debt? And then pay for additional, nice-to-have lifestyle expenses on their credit cards? 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