THE IMPACT OF DEBT ON MILLENIALS

In this era, having debt can be one of the fastest ways to solve financial problems. It can be
an advantage, but it also has a negative side that many people didn’t take it seriously before
making a final decision to have a debt especially for the millennial. The concept of debt itself
that we borrow money and have to pay for it later, includes the risk that we’re going to take, for
example, the interest that we are going to pay for the late payment, and how stressful it will be
that can affect mental health.

One of the debts that are usually involved by the millennials is student loans such as PTPTN
in Malaysia. By borrowing the loan, the student will feel ease from the burden of their family that
especially mostly not from a well-off family. The loan that has been borrowed is more than
enough to support the whole year’s study, and it will help the students to focus on their studies
without thinking of financial obstacles. At some point, some students also take advantage of the
student loan to fulfill their demands in buying expensive things and not using the money for the
purpose itself. It has the positive side, but the negative impact that those students have to deal
with is when the result of the CGPA is not the highest as in the contract agreed and they have to
pay for the full payment once they graduated which automatically involved them with the first
debt. It also leads to the feeling of stress, especially for those that are jobless and unemployed
to pay for the debt because they will doubt whether they can repay or not.

The other impact of debt loan is also involved with emotional impacts such as stress, fear,
panic, anger, depressions, and relief. It is full of excitement at first because when the millennials
incur a debt, especially those without having any adequate knowledge about it, they will
convince themselves that they can pay back the debt that they borrowed, but when the moment
they realize how much they have to pay and for how long, it increases the level of stress and
pressure they feel. A shortage of money can lead to a massive increase in anxiety that causes
mental illness too. When there is no way to pay back the money, it can change the behavior
patterns that can lead to decreased self-control. That’s why people can do anything for the
money as proved by the news and cases of criminals that millennials steal the money, can
injure their own family, and rob people’s houses. It can be one of the factors why millennials do
involve in criminals, but not everyone. The instability of the emotions could lead to the negative
effect that is uncontrollable.

The next impacts will be the daily life impacts. The millennials that have a loan debt,
especially on a student loan will affect their decision or ability to purchase a home, make big
purchases like a car, delay starting a family, and cancel to continue their study. It also shows
the percentage of living with parents is increasing throughout the year. Due to the difficulties to
pay back the debt loan for certain people, it does impact the normal and freedom life as now the
living expenses will be limited and have a big responsibility on paying the debt. The factors can
also base on how the millennial spend their money. The debt might become a burden, but some
people can pay for it persists due to the better money management, they have.

Although the impact of debt is mostly negative, debts also have positive impacts when it
comes to good debts for example is a business loan. By getting a business loan, we can expand
and start a business which can lead to a wise investment. It can be an effect of growing the
business which can help to grow and improve the income. Good money management and
planning will help to make sure that borrowing for our business is a calculated risk. Another
example of the impact of good debts is buying home mortgages. Due to the value of homes and
their appreciation that have proven to be good investments, it will be advantageous for a long-
term impact because of its consistency and people view it as a hedge against inflation.