Young, naive and falling into debt traps beyond their means

YOUNG people are increasingly living beyond their means, spending cash they don't have on mobile phones and credit cards.

Australian Financial Security Authority statistics show a spike in the number of debt agreements involving young people in the past decade.

"Debt agreements have really spiked in the last quarter and (have) been on an uprising trend," Roger Medelson, of Prushka Fast Debt Recovery, said.

Debt agreements are a legal arrangement under the Bankruptcy Act for people who have low income and low assets.

"In our experience, because we get these every day, invariably the people (with debt agreements) are young - in their 20s - and the main sources of debt they have are credit cards and telcos," Mr Medelson said.

"There is a trend there that is measurable and it definitely has spiked."

Stella Maris Catholic Church priest Father Joe Duffy said debt management was a key challenge, particularly among young people.

"I run across debt with young people getting married," he said.

"About twice every 18 months I find a wedding I've celebrated has imploded because the couple can't make the interest payments on account of a wedding.

"I think most young people who want to stay together for life are alert to the things that can go wrong (but) if you get two people in a relationship and neither of them can budget, it's not good."

Debt has driven middle-income earners to seek out discount food from charities.

West Caloundra charity Gateway Care Food Centre has noted a marked increase in demand over the past 18 months.

"I have found that quite a few people paying their mortgage off are husband and wife, both working, and they're struggling to make ends meet," manager Debbie Knight said.

"We're finding a lot more people coming for assistance in Caloundra."

About 800 shoppers use Gateway Care's food shop every week.

"They were once mostly Centrelink card holders, but in the past 18 months we've seen an increase in families who are struggling but haven't got health care cards," Ms Knight said.



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