Generation X
This generation is not only saddled with the highest mortgage debt of all the age groups but they also owe the most debt. In a recent study by Go Banking Rates, they found that 46% of this generation carries credit balances with an average of $4000 or more.
With federal student debt totaled at $1.57 trillion, the majority of federal student debt is concentrated with Generation X. The average Baby Boomer with student loans tends to owe more than the average Millennial. However, on the national scale, Millennials have a larger overall debt than Baby Boomers.
According to Experian's research, Gen X actually carries more debt per individual than the average millennial.
Former Société Générale rogue trader Jérôme Kerviel owes the bank $6.3 billion.
“Shark Tank” investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
Another source of increased student debt is higher college attendance. Since 2000, undergraduate enrollment has increased by more than 3.5 million students. 95 More people are getting graduate degrees too. 96 For many, borrowing money to pay for training and education can yield returns over a lifetime.
Boomers are most burdened by credit-card debt, which an average of 81.4% of boomer consumers are dealing with. That's more than any other generation, and they also carry the highest overall median balance of $3,958.
Unfortunately, millennials grew up in an America where politicians promised them everyone had a right to a college degree. And by making it the government's job to facilitate this process, these same politicians made young people's lives a living hell thanks to their student loan debt.
It's the second largest form of debt in the United States behind home mortgages. 74% of Gen Z borrowers and 68% of millennials who took on student loan debt for their higher education delayed a major financial decision as a result of their debt, according to a report released Wednesday by Bankrate.com.
Key findings
67% of millennials report having credit card debt, while just 36% face student loan debt. About 1 in 4 cardholders across all generations think they'll die in debt. 25% of women think they'll never be debt-free, compared to 19% of men.
Generation Z (or Gen Z for short), colloquially known as zoomers, is the demographic cohort succeeding Millennials and preceding Generation Alpha. Researchers and popular media use the mid to late 1990s as starting birth years and the 2010s as ending birth years.
In February, a Bankrate survey observed that 54% of younger millennials and 46% of Gen Z respondents said their emergency savings had declined since 2020. The survey also revealed that millennials were more likely than other generations to have higher credit card debts than savings balances.
Generation Z was raised on the internet and spends a significant amount of time using phones, tablets and other mobile devices to connect with friends as well as brands and influencers. They have high expectations for the appearance, functionality and security of the online stores they shop at.
Being Frugal
One of the biggest shared financial habits that millennials and Gen Z inherited is frugality, according to Starr Wells, owner of personal finance blog A Centsational Life.
Gen Z is also the smartest and best educated generation. Having an unlimited wealth of information at our disposal has not gone to waste. In America, 57 percent of Gen Z is reported to have enrolled in a two-year or four-year college, compared to 52 percent of Millenials and 43 percent of Gen X.
Millennials are arguably the hardest working generation in the workforce today, albeit how they approach work looks drastically different than their older counterparts. Boomers typically approach work in a hierarchical structure.
Of course, Baby Boomers are still worth nearly eight times as much. The older cohort saw their wealth increase roughly 28% to over $71 trillion since the pandemic began, while Gen-X saw a 65% jump to roughly $42 trillion. Millennials still hold far less wealth than previous generations did at similar ages.
Members of Generation X have the highest average credit card debt at $7,155, followed by baby boomers and millennials, according to credit bureau Experian's latest consumer findings. With an average credit card balance of $1,963, consumers in Generation Z carry the lowest credit card debt.
But despite their higher earnings, millennials still hold less wealth than previous generations did at their age. When boomers were roughly the same age as millennials are now, they owned about 21% of America's wealth, compared to millennials' 5% share today, according to recent Fed data.
Debt is part of the average American's life, and you can start to accumulate it as young as your 20s. New findings from Experian's 2020 State of Credit report show that the average Gen Z consumer (ages 24 and younger) has about $10,942 worth of debt, not including mortgages.
How much money does the average American owe? According to a 2020 Experian study, the average American carries $92,727 in consumer debt. Consumer debt includes a variety of personal credit accounts, such as credit cards, auto loans, mortgages, personal loans, and student loans.
Many people see debt as a necessary evil, but it still is possible to live—and thrive—without using debt or worrying about your credit scores. The benefits of debt-free living are easy to understand, but it's important to know what challenges you'll face and how to overcome them if you stop playing using credit.