Millennials can’t seem to catch a break. The generation born between the late 1980s and the early 2000s often gets ridiculed in society as a group of carefree hipsters who love the latest tech innovations but loathe work and real responsibility. Even if they can shake off this unsavory reputation, Millennials all seem to agree on one issue: they’re finding themselves drowning in overwhelming debt, with no clear idea on how they can possibly pay it off.
What is Burdening the Millennials?
One of the biggest factors of the Millennial generation’s debt is student loans. Millennials are too young to have been afforded financial aid at lower interest rates that some previous generations received. Additionally, college tuitions have been on the rise, making schooling almost impossible to afford without getting financial aid. Often, they borrow more than what their tuition costs so they can also purchase classroom items like textbooks or a laptop. As a result, Millennials not only graduate with student loan debt, they have higher debt than other generations, and the amount they owe is often disproportionately higher than the salaries they earn at their first post-college jobs. A psychiatric center called Yellowbrick researched the amount of student loan debt and determined that between the years of 2004 to 2014, loans had grown by an astounding 74%.
While student loans are clearly a major issue, they are not the only debt weighing Millennials down. According to information gathered by Yellowbrick, “Two-thirds of millennials aged 23 to 35 have at least one source of long-term debt, while one-third have more than one source.” These long-term debts aren’t small, either – usually they owe tens of thousands of dollars to at least creditor. Much of the debt that is not owed to student loans can be attributed to car loans and mortgages, but one of the biggest sources is credit cards.
Yellowbrick pointed out that 39% of Americans carry credit card debt from month to month, and that the average amount owed is $16,000. It’s easy to see how credit card debt can happen – young professionals who are just starting out may have trouble paying their debts on their small salaries and may turn to credit cards to help them purchase food and other necessities. In addition, having a credit card can afford you the chance to buy the not-so-necessary items, like new smartphones, laptops or tablets, and clothes for a brand new professional wardrobe.
How to Avoid Getting Overwhelmed by Debt
Having bills that you cannot afford to pay off will just lead to more debt, and before you know it, you’ve fallen into an overwhelming debt cycle. But you can try to head off this cycle before it happens by avoiding some common pitfalls. First and foremost, keep your expenses as lean as you can – maybe hold off on moving out of Mom and Dad’s house for a few years so you can put all that rent money towards paying off your debts (and you wouldn’t be alone in this decision; according to Yellowbrick, the amount of 25-year-olds living at home is anywhere from 30% to 70% across the U.S.)
Because credit card debt can have such a negative impact on your finances, it’s a good idea to avoid it as much as possible. Get only one or two credit cards, make affordable purchases on them and pay them off every month. The flashy new clothes and top-of-the-line technical gear can wait a few years until you’re making a better salary and you owe less money to your creditors.
How an Ohio Bankruptcy Attorney Can Help
When you’re faced with insurmountable amounts of debt that you can’t seem to pay every month, you might find it helpful to contact a skilled bankruptcy attorney. The bankruptcy and debt relief attorneys at Cleveland Bankruptcy Attorneys have helped many people in the same situation as yours through debt relief solutions or bankruptcy. If you’d like a free consultation of your case, call (216) 586-6600 or email us at advice@clevelandbankruptcyattorney.com.