The millennial generation, which includes adults between the ages of 22-37 years old, has managed to rack up over $1 trillion in debt in the United States. This is a troubling sum of money, and even more so when you consider this amount of debt has increased by 22% in the past five years alone.
So, how did millennials manage to get themselves this deep into a financial crisis? It's not what you may think. To learn more about millennial debt this blog outlines it all.
Millennials: A Product of the Times
Millennials of today are a pure product of the times they have faced in recent years. Most notably, millennials and other generations have lived through one of the world's worst financial crises. And yet, status, wealth, and material gain seem to be a greater priority than ever before.
With thanks to social media, the problem is further compounded. The wealth and status comparison ''game'' has led to a millennial generation trying to play catch up with one another in terms of who has more.
In essence, millennials have become accustomed to living beyond their means, and this has given rise to a critical debt issue.
Credit Cards: The Leading Cause of Millennial Debt
According to reports, millennials in the U.S. carry an average of $42,000 in debt, each. The leading source of this debt is credit card expenditure. In fact, credit card balances comprise a quarter of what older millennials owe in debt.
But why has this generation turned to credit as a crutch? The fact of the matter is that millennials face a number of financial burdens that older generations did not experience. This includes high health insurance premiums, high-interest rate loans, self-funded retirement plans, and exorbitantly high property prices.
To add to this, millennials have adopted an attitude of lifestyle over debt. In other words, they have chosen not to sacrifice their current lifestyle in order to pay off debts and loans faster, despite lower incomes.
The Student Loan Crisis
While it’s not the top factor as many people believe, another major factor in the millennial financial crisis is student loan debt. The average student loan debt is $33,000 per person.
According to research, the number of millennials carrying student loan debt doubled between the years of 1998-2016. During this time period, student loan debt was only $19,000 per person. Today, this sum has truly skyrocketed.
The Payscale Imbalance
In addition to relatively high mortgage loan debt among millennials - the payscale imbalance is also a leading issue that compounds the debt problem.
Wages across the U.S. are not measuring up as the cost of living continues to rise and millennials do not adjust their lifestyles accordingly. Today, paychecks across America do not hold the power that they did only four decades ago. A staggering amount of millennials have admitted that they simply live paycheck-to-paycheck. And less than 40% of this age group feels financially secure.
What's important to consider is that there are a number of factors at play that have contributed to the millennial debt crisis. Quite simply, it's not only spending to blame.
Find Bankruptcy Expertise with Marilyn D. Garner
If you are facing a debt crisis and are in need of an experienced bankruptcy attorney, contact the Law Offices of Marilyn D. Garner today at 817.381.9292.
We offer free case evaluations to every client so you can learn more about options available for managing your debt.