ST. LOUIS–A new survey reveals the type of debt that is most common among Millennials, with many indicating pessimism about their current financial situation and future prospects.
According to the research by Cleaver Real Estate, the most common type of debt among Millennials is credit card debt, with 67% carrying a balance. Of those who have credit card debt, the average amount millennials owe is $5,349.
“Millennials were alive during the economic prosperity of the 1990s, but today, they are America’s poorest generation,” Clever Real Estate said in releasing its findings. “While Millennials aren’t amassing wealth at the same rate as previous generations, they’re also sinking deeper into debt.”
Among the Findings
Three Quarters in Debt
According to Clever Real Estate, three-fourths of U.S. millennials (72%) have some form of non-mortgage debt, with the average Millennial owing $117,000.
A majority of millennials (63%) believe it will take them one to five years to pay off their debt. However, nearly one in 10 (9%) think it will take them more than 10 years, and one in 16 (6%) reckon they’ll never pay it off, according to Clever Real Estate.
“Millennials trace their financial struggles to the 2008 economic crisis, when the oldest members of the generation graduated into a market with few jobs available,” the company said. The stagnant economy depressed wages, leading to lower lifetime wealth and delayed milestones, such as marriage and homeownership.
41% of Millennials Feel Pessimistic About Their Finances.
The sentiment is particularly strong among “geriatric millennials,” those born between 1981 and 1985, according to Clever Real Estate. Although they tend to make more money than younger Millennials, they are 25% more likely to feel very pessimistic about their finances.
“With a staggering debt burden that makes it difficult for all millennials to plan and save for the future, nearly one in 3 (32%) regret going into debt,” the company reported.
Other Findings About Millennials & Debt
Among the other findings in the survey:
- Among Millennials who are debt-free, just 34% have never had debt, while 25% have paid off their debts within the past year.
- Nearly three-fourths of Millennials (72%) have some form of non-mortgage debt, with the average Millennial owing $117,000.
- About 63% of Millennials believe it will take them one to five years to pay off their debt, while nearly one in 10 think it will take more than 10 years.
- Approximately (6%) don’t think they’ll ever pay off their debt.
- 29% don’t pay off their credit card bill in full every month. Of those who have credit card debt, the average amount they owe is $5,349.
- 48% say they have student loans, with the average respondent owing $126,993.
- The average Millennial spends 47% of gross monthly income on housing each month — 1.5x more than the recommended 30%.
- 53% own a home, 16% of Millennial homeowners regret their purchase.
- Of those who don’t own a home, 30% don’t think they’ll ever be able to afford one.
- Not saving enough is the No. 1 financial regret among Millennials (37%).
- 25% aren’t confident they could afford a $500 emergency expense out of pocket, and one-third (33%) don’t think they could afford a $1,000 emergency.
- About 77% of millennials already have children or want them in the future, but 25% say they can’t afford them.
For more detailed findings, the full report can be found here.
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