Millennials are sinking deeper into financial debt amid continued economic downturn, financial experts said.
According to a study done by Real Estate Witch, 63 percent of millennials believe it will take them one to five years to pay off their debt. However, nearly 9 percent think it will take them more than 10 years, while six percent reckon they’ll never pay it off.
millennials aren’t lazy, we just have student debt and gas is $6 a gallon, sry we turned down your 65 hour work week 45k starting salary with no benefits offer
— samantha jay (@checkpleaseeeee) August 2, 2022
The study, which asked 1,000 millennials about their finances, savings, and credit history, also found that most of the Net Generation have more than $100,000 worth of debt with most of it not connected to a mortgage. Meanwhile, more than 70 percent have some form of non-mortgage debt, with the average millennial owing $117,000.
Nearly half of millennials also reported having some form of student loans with the average person owing $126,993, but the most common type of debt was credit card debt, with 67 percent of millennials having some amount of debt on a credit card.
The study added that Generation Y are no strangers to financial anxiety, tracing back to the 2008 financial crisis.
“Millennials 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,” the Real Estate Witch reported.
“Millennials — now in their prime working years — 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,” the study continued.
Additionally, millennials on average spend 47 percent of their gross monthly income on housing each month, nearly two times more than the recommended 30 percent.
Only 10 percent of the survey respondents said they have never had debt, while 1 in 3 millennials admitted to not paying off their credit card in full every month. On average, millennials owe $5,349 in credit card debt.
Finally, the study concluded that only 1 in 3 millennials are debt free, while 1 in 4 have already paid off their debt within the last year.
