Liz Enriquez remembers when she was “hella broke.” But that was only two years ago.

Having paid off her $15,000 student debt, the 27-year-old from Hamilton, Ont. now has a house, her own business, and lots of coconut oil.

“It’s about being comfortable with less,” Enriquez said in a phone interview.  “I don’t buy beauty products, and I use coconut oil for pretty much everything - for skin, hair and making toothpaste.”

Enriquez is an anomaly amid Canada's stark reality when it comes to consumer debt. ​The average Canadian owes about $1.78 in credit market debt for every dollar of disposable income, according to the latest data from Statistics Canada, while a report released by Equifax Canada earlier this week showed that bankruptcies among consumers rose 15 per cent in the last half of 2018. 

And young Canadians are not immune: From using gyms at friends’ condos to frequenting local coffee shops for free Wi-Fi, more young Canadians are having to find creative ways to save money as they face the perils of living paycheque to paycheque. 

But for Enriquez, she made a conscious choice to get out of debt by going beyond those measures people typically take to alter their lifestyles.

“Ditching your daily latte and avocado toast will just be an extra $150 a month, which amounts to really nothing,” she said. “I had a $40K job but my lifestyle had to be $20K.”

It’s the type of advice that Jessica Moorhouse finds herself giving to her clients all too frequently.  “Maybe it is that $5 latte that you can eliminate from your day,” said the millennial money expert and accredited financial counsellor. “But debt is just a symptom of a larger issue."

Along with offering template spreadsheets, video one-on-ones, and customized homework, she coaches her clients – 95 per cent of whom are women – on realigning their personal finances with their values.

"It's a confidence issue," said Moorhouse. "It's like, 'Maybe I won't change banks because of fees or maybe I won't invest because I'm afraid of losing money.'"

Enriquez, who claims she was a “stressed-out, type-A student that needed everything under control” agrees that what she needed was clarity to confront her situation. “Money was a huge trigger for my anxiety,” she said. “I needed a visual representation, a tracking sheet.”

It was her time on Vancouver Island in 2012, where Enriquez says her relationship to money changed.

“I was working with a bunch of hippies,” she said.  “I’d meet people who’d live off of just four pieces of clothing.  They’d even wash clothes in the river.”

Moorhouse also notes the negativity and fear attached to millennials and money management – the impression that they may be shopaholics, lazy, or uneducated. Her mantra is that money should be a positive element in one’s life. "You should see it as being able to make more choices, take more risks, buy things that bring you joy instead of causing stress," she said. 

But spending without having the cash has its consequences. Barry Choi, a Toronto-based money blogger, says people just aren’t understanding where their money goes. "Credit cards help you build a credit score but people need to understand that if you don’t pay the minimum balance, debt can go to collections and ruin your credit," he said.  

Choi also notes how students often face money troubles given that they have easy access to credit. “Every September, there are always promos like getting free T-shirts and cookies or whatever," he said, referring to student loans. “For our parents, it was about saving first and spending what's leftover. But now, it's like people spend and save later."

For Enriquez, she was somewhat lucky. “I never had money, so I never spent it,” she said jokingly.  Emigrating from Mexico at age five, she learned to be frugal and resourceful from her parents. “My mom would dry clothes, not use a dryer. We used the dishwasher as storage.”

She thanks her dad for showing her how to shop smart. They’d go to garage sales every weekend in the summer and map out good neighbourhoods. “It was so embarrassing growing up, but now I teach my friends how to bargain hunt,” she said.  “My house is like a museum of pride.”

When it comes to debt repayment, Moorhouse adds that “people always focus on cutting back, and not so much on what they can do extra." Moorhouse, who majored in film, side-hustled after graduation and managed to pay off her student loan in nine months. "I've always had a second job, and it's been a big reason I've been able to stay out of debt." 

There’s also accounting student, Brenda Martin of Vancouver, who says she's avoided getting a student loan by working full-time. In addition, through years of filing tax returns for her millennial peers, Martin figured out that by asking her employer to increase her payroll withholdings by an extra $25 at source – and give it straight to the government instead of getting the money upfront – this could result in an extra refund of $650 at tax time.

“I always look at it as a mini savings account and you could use your refund each year to pay down debt,” she said. 

She’s referring to the personal basic exemption amount, the amount of taxable income one can earn before paying any federal taxes. Martin said those who may have multiple side jobs or change jobs frequently aren’t aware that they max out on this amount within a few months and end up owing tax at the end of the year.

It's one strategy that young Canadians can try to avoid the debt trap.  

“I know tons of people that have debt and that’s the norm for them,” Enriquez said. “Like probably my PhD friends.”