According to new data released by Northwestern Mutual, an average of $27,900 in debt is carried excluding mortgages by millennials.
Generation Z who was born between 1995 and 2015 have an average debt of $14,700.
Chantel Bonneau, wealth management adviser at Northwestern Mutual said: Having sizable debt at a young age “is the new normal,”
“There are lots of people who exit school, and before they start their first job, have debt. That is a different situation from 30 years ago.”
The main source of debt for millennials is credit card bills, and Gen Z’s is student loans. CreditCards.
com held a poll and 40% millennials stated the top reason they carried a credit card balance was daily expenses such as groceries, childcare, and utilities, and about 20% pointed to unexpected emergencies such as medical bills and car repairs.
More than other age groups, 45% of millennials and 43% of Gen Z accepted that they feel guilty about their debt at least every month.
According to Buzzfeed, “One-fifth of all respondents said their debt made them physically ill at least monthly, 45% said it made them anxious at least monthly, and 35% said they felt guilty once a month or more.”
Pew Research Center said in a report earlier this year, “The share of young adult households with any student debt doubled from 1998 (when Gen Xers were ages 20 to 35) to 2016 (when millennials were that age).”
”In addition, the median amount of debt was nearly 50% greater for millennials with outstanding student debt ($19,000) than for Gen X debt holders when they were young ($12,800).”
According to Pew, last year millennials had a median household income of about $71,400 but because of their debt, their savings lag behind what older generations had in the bank at the same age.
“The fact that there’s been some year-over-year improvement in debt levels is good, but the numbers still remain worryingly high,” said Emily Holbrook, senior director of planning at Northwestern Mutual, in a statement.
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