Debt by Generation
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Debt by Generation

Debt by Generation

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The Generation with the Most is Not Who You Think.

If someone were to ask you which generation they thought struggled the most with debt many would have the same answer…Millennials. It has been thought over the years that Millennials and younger generations were the ones struggling financially. Digging themselves into holes that could not be resolved without taking drastic measures. This simple assumption is wrong. Experian completed a study earlier this year that broke down debts by generation. This study “State of Credit” paints a picture of what debt in America looks like.

D-E-B-T in the USA
First, let’s look at the U.S. and the average debts possessed by many individuals As well all know there are different kinds of debt, with the most common being mortgages, credit cards, personal loans, and student loans. Most of the total debt in the US is allocated to mortgages. Next is auto loans, bankcards, and finally student loans. The average amount of debt in the U.S. is around $78,030. American’s are averaging credit scores ranging between 673-675. Consumer confidence has boosted and credit card spending hit a new record in November. While this is a good sign for consumer spending, it could spell trouble for those who cannot manage their spending habits. Some age groups are handling debt just fine while others are in hot water. So, which generation is truly suffering the most financially?

Millennials
Millennials the generation stereotyped as being financially unstable. The ones who are automatically associated with crippling student loan debt and mounting credit card debt. This was the generation who graduated college and began their professional careers shortly after the Great Recession that ended in 2009. This forced many to take lower paying jobs and caused their careers to come to a halt. The good news is the generation associated with debt is digging themselves out. The improving economy has allowed Millennials to improve their finances. As of 2016, they had shaved their overall average debt by 8% to $222,000.

Generation X
While many believe that Millennials are the generation harboring the most financial hardship it is in fact Generation Xers. This generation is not only saddled with the highest mortgage debt of all the age groups but they also owe the most debt. In a recent study by Go Banking Rates, they found that 46% of this generation carries credit balances with an average of $4000 or more. Furthermore, it is in fact Generation X, not millennials who hold the largest average of student loan balances. Between the high mortgages, the mounting credit cards, and excess student loans it is Generation X that suffers the most financially.

Baby Boomers
As Baby Boomers start to retire they are doing so with more debt on their shoulders. While they are not in as dire straits financially as Generation X they still hold the second highest mortgages as well as auto loans, and they hold almost as much credit card debt as Millennials. Interestingly enough, though this generation is not at the top of the debt pyramid they are still more likely to file for bankruptcy. Per the American Bankruptcy Institute, baby boomers aged 45 to 64 make up 42% of all bankruptcy filings. Entering their golden years with debt as well as increasing medical costs could be a few factors that attribute to this statistic.

Bankruptcy: A Chance to Close a Chapter Financially & Start Fresh
No matter your age, income, or position in life financial hardships put you in a place that no one wants to be in. The stress enough is a reason to consider what you can do to improve your financial situation. That is where bankruptcy comes in. A simple phone call to learn more could be just what you needed. If the creditors won’t stop calling, if your debt seems out of control, or if you are up worrying about your debt give us a call. Learn how bankruptcy can help you erase your debt and get the fresh start you deserve. Don’t go another sleepless night due to your finances.

For more information on how bankruptcy can help you call my office today and schedule a FREE consultation 423-267-8000

Written By: Rebecca Kidd

Resources:
Value Penguin Study
A Peek Into American Debt by Generation
Generation of Debt: The Average Credit Card Debt by Age
Experian Study: State of Credit: 2017

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