Most Americans have some type of debt – an auto loan, a mortgage, student loans, credit card balances, unpaid medical bills, etc. According to an Experian consumer debt study in which the group analyzed credit report information for a statistically relevant sampling from their database, outstanding consumer debt in the U.S. reached $14.88 trillion in 2020. That shows an increase of more than $3 trillion from the $11.32 trillion average in 2010. In 2020, the average individual debt was around $92,727. But even more interesting is that the debt burden was not spread evenly over generations.
Gen Z, Millennials, Gen X, and Baby Boomers: Who Carries the Most Debt?
Of the four “generations” that make up the current population, Gen X carries the highest average debt.
1. Gen Z (who range from ages 18 to 23): Average debt: $16,043
2. Millennials (age 24 to 40) Average debt: $87,448
3. Gen X (age 41 to 56)— Average debt: $140,643
4. Baby Boomers (age 57 to 75)— Average debt: $97,290
Problem Areas for Each Generation to Avoid:
For the Gen Z group, the average individual holds $16,043 in debt, but an eighth of that is credit card debt (the most dangerous kind of debt). The Gen Z generation should be particularly cautious carrying a balance on a credit card as they have the highest interest rates out there and create a slippery slope that can quickly lead to financial trouble. Many Millennials are purchasing their first home and having their first baby within a few years of each other – it’s important to consider the combined financial implications of these two life changes and prepare. Millennials have the least amount of give when it comes to their financial planning and debt management. Many Gen Xers are sending their kids to college and should remember that they should focus on paying off their own debt before taking out more debt to provide for their kids’ education (the kids can get financial aid for school, but Gen Xers won’t be able to apply for financial aid to fund their retirement when the day arrives). Baby Boomers tend to have a significant amount left on their mortgage, but instead of focusing on paying off the mortgage, Baby Boomers should focus on saving.
Regardless of which generational group you fall into, if you are struggling to control your debt or you need to talk about obtaining a discharge of debt through bankruptcy, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. You are in good hands with Kenneth C. Rannick P.C