The State of Money and Debt Among Millennials

Debt Among Millennials – MOA Accounting Miami beach accountants are sure you’ve heard of this generation. Often associated with over-the-top lattes, avocado toast, and subscription boxes delivered at home for just about anything. According to Wikipedia, Millennials are also called Generation Y, right before Generation Z and after Generation X.

Debt Among MillennialsIn other words, born in early 80s. But popular media, includes Millennials to be born as late as 1996.

This population is associated with confidence and entitlement. The Pew Research Center estimated that by this past year, Millennials will surpass the Baby Boomers Generation to become the largest generation in the U.S. Time Magazine estimated there was about 80 million Millennials in America.

Millennials are highly educated and have been born right into the digital age.

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They communicate via text messages, develop friendships through social media, and shop right from their phones. They have high expectations for career advancement, salaries and the like. However, MOA Accounting Miami beach accountants found out that a recent study by the Balance reported 9 in 10 affluent Millennialls are in debt. That’s right, even though Gen Z, Millennials, and Gen X are so different, they share how they view credit, and debt.

An affluent Millennial for this study was defined as an individual between the ages of 23 and 38 with above the average household income. According to the Balance study, 86% of affluent Millennials consider being debt-free a marker of success, but 88% of respondents said they had debt and 50% don’t pay off their credits cards at the end of the month. So what’s the state of money and debt among Millennials? MOA Accounting found out 51% had mortgage debt, 50% had car loans debt, 39% had student debt and 18% had medical bills. Only 12% said they didn’t carry debt.

However unlike generations before them, Millennials don’t think of paying off their debt as their number one priority.

average millennial savings

In fact, living comfortably and saving for retirement is more important to them. For example, a Charles Schwab Index for 2017 reported that 60% of Millennials will buy a cup of coffee that costs more than $4, compared to only 40% of Gen X’ers and 29% of Baby Boomers. 79% of individuals polled in same study said they would spend money on dining out versus only 56% of Baby Boomers.

MOA Accounting Miami beach accountants learned Millennials will spring for extras too, such as Uber rides, electronic gadgets and clothes they don’t need. In fact paying off debt came back sixth on list of priorities in the Balance study. The state of money and debt among Millenials really reflects their behaviors of convenience, competing with friends, preferring experiences versus things and a later start in home ownership and having children.

Debt Among Millennials – Even though they make a more than average income, 28% of affluent Millenials will never get out of debt.

good debt and bad debt

They are also more confused about what is considered good debt and bad debt. Mortgages for example are considered good debt because it typically appreciates over time, while a car loan is considered bad since that asset depreciates over time. 1 in 4 Millenials think credit card debt is a good thing, even though that’s a misconception.

If you’re a Millenial who needs help with their financials, MOA Accounting Miami beach accountants can help. Just call 305.868.7620 and get started on a more financially responsible new year.