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Many Millennials, who were alive during the economic boom of the 1990s, now find themselves on the other side of the balance sheet. In fact, they have earned the unenviable title of America's poorest generation.
Nearly three-fourths of U.S. Millennials have some form of non-mortgage debt averaging $117,000, according to a new survey from Real Estate Witch. More than 6 in 10 Millennials believe it will take 1 to 5 years to pay off their debt; 1 in 10 say it will take more than 10 years; and 6% believe they never will pay it off.
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Millennials, now in their prime working years, 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 stagnant economy depressed wages, leading to lower lifetime wealth and delayed milestones, such as marriage and homeownership. They were steamrolled again in 2020 when the pandemic-induced recession wiped out stock market gains, retirement savings and emergency funds built in the previous decade.
It's no wonder that more than 40% of Millennials feel pessimistic about their finances. The sentiment is particularly strong among "geriatric Millennials," those born between 1981 and 1985. 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-third regret going into debt.
Among the other key findings about Millennial debt:
- Among Millennials who are debt-free, just one-third have never had debt, while 25% have paid off their debts within the past year.
- The most common type of debt among Millennials is credit cards, with 67% of those with debt carrying a balance.
- Nearly half of Millennials with debt 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 – one-and-a-half times more than the recommended 30%.
- Not saving enough is the No. 1 financial regret among millennials (37%).
- One-fourth of Millennials aren't confident they could afford a $500 emergency expense out of pocket, and one-third don't think they could afford a $1,000 emergency.
- About 77% of Millennials already have children or want them in the future, but one in four say they can't afford them.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
