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Millennials ‘overwhelmed’ by debt

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NEW YORK — Student loans. Credit cards. Many millennials feel as if they are drowning in debt.

Four in 10 millennials say they are “overwhelmed” by their debt — nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennials between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old.

To try to get out from underneath it, 47 percent said they spend at least half of their monthly paychecks on paying off their debts.

On average, respondents put the biggest chunk of their income toward paying credit card bills, followed by mortgage debt, student loan debt, auto debt and medical debt.

But even as they struggle financially — with more than half living paycheck to paycheck — many are making sure to at least tuck a little money away for savings.

More than half of respondents said they are currently saving for retirement. Of that group, 46 percent are saving between 1 percent  and 5 percent  of their income. Another 31 percent are saving between 6 percent  and 10 percent , while 18 percent  are saving more than 10 percent .

“The silver lining of the recession that started over five years ago is that a majority of millennials get that saving is a necessity and even equate it with ‘surviving’ tough times,” said Karen Wimbish, director of Retail Retirement at Wells Fargo.

And their optimism about the future hasn’t faded.

The majority, or 72 percent, of millennials said they “are confident they will be able to save enough to create the lifestyle they want in the future,” the survey found. And 68% said they expect their standard of living will be better than that of their parents.

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Filed in: News

2 comments

  • Melody Lin (@MelodyLin9)

    In America, we have our priorities messed up!!! Student loans aren’t the only problem. Every “millennial” feels like they are entiteld to all he latest iStuff, a new house in the hip part of town, and a BMW 3 series. We are a bunch of spoiled brats.
    Like some other guy said, we spend too much money on things that nobody else in the world spends money on – clothes dryers, cable TV, dining out every day, dish washers, etc. etc.
    Don’t be foolish and fall into the trap of trying to measure your wealth by the value of your assets. Markets change. Valuations fluctuate. Instead, measure your wealth by the amount of cash flow your assets consistently generate. And follow these 7 steps:
    1) Pay off your debts as fast as you possibly can. If this means living in a crappy studio apartment and eating ramen everyday for a couple of years, do it. If you want to buy a car, get a reliable beater. Get insurance for $24/month from Insurance Panda. Forget about buying a house until your debts are paid off.
    2) Once you are out of debt, stay out of debt. The only exception to this rule is a vehicle and a house. If you want to get a nicer car, buy used and be able to pay it off in a year or 2.
    3) If you are going to stay in the same spot for at least 10 years, buy a house, preferably with at least a little bit of usable land. An acre is good, 5 acres is better. Take the amount you are pre-approved for and cut it in half – that’s how much you should spend on a house. Come to the table with at least 20% down and make a couple of extra mortgage payments every year. If you’re going to be transferred or relocate every 5 years, forget about buying a house and rent instead.
    4) Develop multiple revenue streams. Do contract work. Start a business on the side. Invest in a business as a silent partner. Raise chickens, breed dogs or grow apples. Build websites. Buy and sell antiques. Acquire rental property. Sell something that generates residual income. Learn to play the currency markets or trade stocks. Do whatever you can to generate income from multiple sources.
    5) Grow these multiple revenue streams to the point that they generate enough consistent and reliable cash flow to replace your current income.
    6) Make as much as you can. Save as much as you can. Give away as much as you can.
    7) Retire!- the sooner, the better. Be sure you understand that “retirement” doesn’t necessarily mean you stop working, it just means having the freedom to do what you want to do, when you want to do it.

  • ratfink

    listen kids, enjoy your life. spend every dime, take everything you can get your hands on, fall in love if possible or at least get a good lay every once in a while.
    “For when the One Great Scorer comes
    To mark against your name,
    He writes – not that you won or lost –
    But how you played the Game.” Grantland Rice.

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