This Is The Real Average American Millennial Debt
Ever been in debt? If your answer is yes, then you probably have an experience of feeling embarrassed or faced with the consequences of failing to pay up in the required time.
Whether you take a loan from the bank or borrow from a friend, there is a hard-hitting phrase that says ‘the best way to deal with debt is to pay up.
Being in debt can be frustrating especially if an individual has no means to pay up the money he/she is owed.
Some of the factors that lead the young generation to be in debt are avoidable whereas others are fueled by harsh economic times.
As a result of pressure, most of the middle-aged people tend to have flashy lifestyles which they cannot afford.
In some scenarios, they end up taking loans to fund their lifestyle.
Something about taking loans is that whether it was for a good course like paying for your studies or not, you eventually have to pay.
Statistics Of The Average Millennial Debt
According to Northwestern Mutual’s 2018 Planning & Progress Study, the average millennial (aged 18 to 34) had about $36,000 in personal debt, excluding home mortgages.
In a related report by a new creditcards.com over 60% of the millennials aged between 18-37 (with debts) don’t know when or if they’ll ever be able to pay off what they are owed.
From this 60 percent, 42% do not know when they’ll be able to fully pay the debt and 20% expect to die in debt.
Although emphasis has been put on the millennials, the older generation also shares the same debt predicament. In fact, over 35 percent of those over age 73 predict that they’ll never pay off their debt.
Even though most of us assume that millennials sink financially as a result of student loans, another research reveals that they are actually drained in all sorts of debts.
According to CNBC reports, over 44 million Americans have student loans with the average debt hovering around $33,000.
And yet that’s not the No. 1 source of debt for the average older millennial.
Focusing on student loans, a Pew Research Center found that the number of households with student loan debt doubled up from 1998 to 2016.
Apart from student loans, the rise of loaning apps has made it easier for people to access borrowing platforms with some offering very friendly loaning rates and terms.
According to findings based on a survey by Northwestern Mutual, student debt accounted for about 16 percent while credit card balances make up a full fourth of the average older millennials owe.
Other financial burdens that American millennials are forced to deal with include retirement savings and mortgages.
Funny enough some of the millennials would rather save than pay up their debts.
How To Avoid Being In Debt
Surviving in a harsh economy without taking loans once in a while can be difficult but there are several financial habits that can help you stay out of trouble with your creditors.
It is always best to minimize debt and avoiding overdue bills.
There are many ways that the millennials can beat being in debt and it can all be captured under practicing proper financial planning habits.
Here are some tips that can help you avoid being in debt;
- Saving: Find what saving plan works for you and embrace it.
- Investing: Being dependent on one source of income might not be good enough to cater for all your needs. Investing allows you to grow financially and there is nothing as good as being financially stable.
- Spend within your means and limits: Your expenditure should be reasonable and you should never feel entitled to lead a lifestyle that you cannot afford at the expense of pleasing friends.
- Avoid impulse buying
- Avoid applying for more than one or two credit cards at a time.
- Take loans from credits lenders who offer lower interest if you cannot do without borrowing.