Why do millenials have so much debt?
Millennials are not in debt due to cavalier spending, but because they have been dealt a bad hand. Times are tough, with the 2008 recession setting off a chain of events that has resulted in a tough job climate, expensive education, and an expensive housing market.
King said millennials' purchasing preferences and the soaring cost of living has led many into "a vicious cycle of taking on more debt." Many were "forced" to rely on credit cards and loans to meet their needs, adding to their "crippling debt pile."
Generation Z is racking up more credit card debt than previous generations, while Generation X holds the highest average of credit card debt, according to recent data from Credit Karma.
Millennials are more likely to be living with their parents
Once again, this may make it less likely for millennials to seek out debt to begin with, since they likely have fewer living expenses.
Close to half of respondents report feeling hopeless about their financial situation. Many factors are at play, including income, debt, dwindling savings, and poor financial choices. Close to 75% of millennial women and 70% of all those surveyed say they struggle to make ends meet with their current salary.
Key Takeaways. Millennials are confronting the distinct financial challenges they have, such as a post-recession job market, high student loan debt balances, a more expensive housing market, and growing credit card debt.
The World Happiness Report is out and Finland has once again been declared the happiest country in the world. However, the report reveals that Gen Z (aged 15-24) are unhappy.
Americans — particularly Millennials and those with lower incomes — are becoming increasingly overextended financially: Credit card and auto loan delinquencies have not only surpassed pre-pandemic levels, they're the highest they've been in more than a decade.
A gigantic wealth transfer over roughly the next decade will likely make millennials “the richest generation in history,” according to a report from global real estate consultancy Knight Frank.
How much debt do millennials carry?
| 2020 findings by generation | Gen Z (ages 24 and younger) | Millennials / Gen Y (ages 25 to 40) |
|---|---|---|
| Average retail credit card balance | $1124 | $1871 |
| Average non-mortgage debt | $10942 | $27251 |
| Average mortgage debt | $172561 | $232372 |
| Average 30–59 days past due delinquency rates | 1.60% | 2.70% |
While Americans of all ages are grappling with higher balances, Gen Z and millennials are seeing the largest average increases in total debt and the steepest decline in credit scores, according to data provided to Fortune by personal finance company Credit Karma on tens of millions of member accounts.
Generation X carries the highest average balance at $44,290 per borrower. Baby Boomers held the second-largest amount of average debt at $42,520. 21.2 million Generation X individuals have student loan debt, more than any other generation. Millennials carry an average balance of $32,800 per borrower.
We counted millennial Americans as anyone who was between the ages of 18 and 40 as of 2022. Based on these data points, we found that the average salary of a millennial is $1,376 per week, which equates to $71,566 per year.
Some have hypothesized that the slow aging of a generation is thanks to the rising popularity of "tweakments" like filler and botox, or the fact that they have a better understanding of the importance of SPF for anti ageing, while others cite the well-analyzed idea that millennials have a sheer inability to "grow up."
The average Millennial salary is about $47,034, according to the U.S. Census Bureau. The average Millennial household makes $69,000 a year, according to the Pew Research Center.
Respondents across generations cited higher costs from inflation, consumer debt and the need to build emergency savings as the main barriers to reaching their retirement savings goals.
Gen Z is also expected to do better on pay than their Millennial predecessors, earning 14% more on average by age 30. “The good news for Gen Z is that the gap between renting and owning is smaller than it was for Millennials while incomes are higher,” the report found.
Credit card debt by generation
Gen Z currently has the lowest average amount of credit card debt at an estimated $2,854. Credit card debt for millennials and Gen Z is increasing, but this type of debt is decreasing for Generation X, baby boomers, and the Silent Generation.
- Gen Z (ages 18 to 23): $9,593.
- Millennials (ages 24 to 39): $78,396.
- Gen X (ages 40 to 55): $135,841.
- Baby boomers (ages 56 to 74): $96,984.
- Silent generation (ages 75 and above): $40,925.
What percentage of millennials are debt free?
Only 10 percent of survey respondents said they have never had debt, which means that 90 percent of millennials have had some sort of non-mortgage debt in their lives.
Key points. New research shows Millennials and Gen Z exhibit loneliness and alienation more than other generations. It is possible to be technologically "connected" and socially disconnected simultaneously.
Young adults in America like Hannah are reporting higher stress levels than older generations, with 18- to 34-year-olds saying their average stress level is a 6 out of 10, compared with a 3.4 among people ages 65 and older, APA's 2023 Stress in America survey found.
On average, people in the United States are happiest and most satisfied with their lives when they're young, experience a decline in both metrics in their 40s (often called a midlife crisis), and then rebound in their 60s.
Between now and 2044 in the US, the Silent Generation and Baby Boomers are expected to hand over the reins of their significant wealth to Millennials, according to The Wealth Report, a periodic report from global property consultant Knight Frank.
