Drowning in Debt: The Millennials’ Dilemma

Julia Chang
Posted

youngwomanbillsHere’s one area where Boomers have a leg up over their Millennial counterparts: stress over debt.

According to a recent Wells Fargo survey, 42% of people between 22 and 33 said they feel overwhelmed by the amount of debt they carried—nearly twice the rate of those ages 49 to 59 who feel the same way. To help pay down their obligations, 47% of young people are putting at least half of their take-home pay toward tackling the debt.

What’s their biggest cause of concern? Student loans, with 36% saying it is their top financial worry right now, followed by non-student loans and daily expenses. The good news is that their debt concerns don’t seem to be diminishing the outlooks on their financial futures: The majority of Millennials still believe they will have a better standard of living than their parents.

The younger generation also seems to recognize that saving for retirement is a priority, according to the report—although young women aren’t saving quite as much as their male cohorts: 50% say they are currently saving for retirement, versus 61% of men.

That’s partially because they are earning less than men of their generation, although, according to CNBC, it may also be due to a lack of financial literacy or greater risk aversion when it comes to investing.

Still, the fact that they are already putting money away is a good sign. “The silver lining of the recession … is that a majority of Millennials get that saving is a necessity and even equate it with ‘surviving’ tough times,” Karen Wimbish, director of Retail Retirement at Wells Fargo, said in a statement. “But millennial women are starting out their working lives making far less than men and, as a consequence, are saving less and feeling less contentment at the start of their working lives.”