Millennials largest debt not from student loa

[spartan max2]

A small survey. However, the largest part of debt was from credit cards.

This is not true for me. Mine are all student loans, but I do know alot of people with creditcard debt. 

 

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Millennials (defined here as ages 23 to 38) have racked up an average of $27,900 in personal debt, excluding mortgages, according to Northwestern Mutual's 2019 Planning & Progress Study. The findings are based on a survey conducted by The Harris Poll of over 2,000 U.S. adults.

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The biggest source of debt? Credit card bills. And that's a "troubling" trend, Chantel Bonneau, a financial advisor with Northwestern Mutual, tells CNBC Make It.

https://www.cnbc.com/2019/09/18/student-loans-are-not-the-no-1-source-of-millennial-debt.html

[Farmer77]

This thread will be like catnip for the generation that ****ed up the economy.

[XenoFish]

Credit cards are a slippery slope. You got all that money, then interest takes a big bite out of you. 

[Gromdor]

It's sad.  The average Net Worth (stuff you own subtracting your debt) is $692,100.  Don't have that much?  Don't feel bad- the overly wealth skew that total.

Median net worth is $97,000.  Meaning half the people in America has less than that and half have more.  So that's the number you want to use to see if you are "winning".  But I'll be blunt.  That total includes retirement savings, so the future is pretty bleak if you are just breaking "average" considering you need at least $1 million for each $40,000/year increment you earn.

What's alarming is that 1 in 5 Americans have a negative net worth: https://www.marketwatch.com/story/one-in-five-american-households-have-zero-or-negative-wealth-2017-11-11

That literally means that the average illegal immigrant is wealthier than them.  Of course they have a better standard of living in most cases, but their lifestyle is based on money the bank is giving them to live on. 

The excessive student loans and credit card debt is what is doing this to us.

[Dark_Grey]

For our parents, life long debt was a mortgage. When houses became too expensive for Millenials, the student debt scam was created. Same life long debt but with a new face. 

[Dark_Grey]

16 minutes ago, XenoFish said:

Credit cards are a slippery slope. You got all that money, then interest takes a big bite out of you. 

Food and "cost of living" expenses are going up every year but wages are mostly stagnant. A lot of people turned to credit cards because they don't have a choice.

[XenoFish]

1 minute ago, Dark_Grey said:

Food and "cost of living" expenses are going up every year but wages are mostly stagnant. A lot of people turned to credit cards because they don't have a choice.

Been there done that. 

[Dark_Grey]

4 minutes ago, XenoFish said:

Been there done that. 

I hear ya. Inflation is a b*tch. Just curious, how old are you? (Ballpark if you don't want to be specific) Also, home owner? Renter?

Edited September 19, 2019 by Dark_Grey

[HandsomeGorilla]

The only reason I even have a credit card is so that I can still have established credit. Outside of that, everything comes directly from my bank account. I don't like the idea of forgetting what I've spent money on.

Unfortunately, so many of us live in the moment and are so used to modern conveniences that we're often considering luxuries 'necessities'. Having a brand new car every couple years isn't a necessity; neither is your outrageous cable bill. 

[XenoFish]

9 minutes ago, Dark_Grey said:

I hear ya. Inflation is a b*tch. Just curious, how old are you? (Ballpark if you don't want to be specific) Also, home owner? Renter?

I'm 40. I'm also self employed which has screwed me over on housing. So I bought some land and did a shed conversion on it. I plan on building a smaller cabin and turning the larger building into a workshop. 

[+Desertrat56]

I have to say that for many years I never earned enough to have a credit card, then when I did and got one I over spent using it, then had to be frugal for years to pay off the credit card.  Then I spent 2 1/2 years unemployed and had a whole new set of debts.  Now I earn a lot of money and it goes towards a large mortgage and I am stupid enough to use my credit cards.  Not for eating out, but for home repairs.  It can be a vicious cycle and is very hard to jump off that merry go round.  I have done it twice in my life and now feel like I have to again soon just to survive retirement.

Edited September 19, 2019 by Desertrat56

[Dark_Grey]

4 minutes ago, XenoFish said:

I'm 40. I'm also self employed which has screwed me over on housing. So I bought some land and did a shed conversion on it. I plan on building a smaller cabin and turning the larger building into a workshop. 

That's awesome. I have similar plans for far down the road. I'm 33, on my second house now. Most of the people I know in my demographic are house broke. Deep in debt, both parents working and still just barely getting by. The long term outlook for the economy in Canada is not good... 

[XenoFish]

Just now, Dark_Grey said:

That's awesome. I have similar plans for far down the road. I'm 33, on my second house now. Most of the people I know in my demographic are house broke. Deep in debt, both parents working and still just barely getting by. The long term outlook for the economy in Canada is not good... 

I micromanage money. Did a lot of screwing up in my 20's, so I got a lot smarter about how I use money. 

I've been told by family that I'd be happy living in a cardboard box. I'm thinking, yep, no rent or mortgage.

[Gromdor]

4 minutes ago, Desertrat56 said:

I have to say that for many years I never earned enough to have a credit card, then when I did and got one I over spent using it, then had to be frugal for years to pay off the credit card.  Then I spent 2 1/2 years unemployed and had a whole new set of debts.  Now I earn a lot of money and it goes towards a large mortgage and I am stupid enough to use my credit cards.  Not for eating out, but for home repairs.  It can be a vicious cycle and is very hard to jump off that merry go round.  I have done it twice in my life and now feel like I have to again soon just to survive retirement.

You have a saving account set aside for emergencies?  Having to draw from credit whenever a problem pops up hurts 2x as much.  The initial whammy and then the additional cost of paying the interest at credit card rates.  I set up an automatic transfer to a savings account for myself for $50/month.  Thinking of it as a bill helps rationalize it over say paying $50 more on a mortgage payment.

[XenoFish]

I think mindset plays a major role. Some want a high dollar life off a McDonald's budget. 

[acute]

I feel sorry for students. Drinking, drugs, vaping, gaming, and iPhone 12's aren't cheap. 

 

Edited September 19, 2019 by acute

[spartan max2]

35 minutes ago, Dark_Grey said:

For our parents, life long debt was a mortgage. When houses became too expensive for Millenials, the student debt scam was created. Same life long debt but with a new face. 

Except millennials would also like to be able to buy houses at some point.

[Gromdor]

2 minutes ago, acute said:

I feel sorry for students. Drinking, drugs, vaping, gaming, and iPhone 12's aren't cheap.

It's not just the kids.  It's the old people too.  It's worse for them.  Their shot at life is almost up and they are living with the results.  The kids at least have time on their side to fix their money problems.

[+Desertrat56]

5 minutes ago, Gromdor said:

You have a saving account set aside for emergencies?  Having to draw from credit whenever a problem pops up hurts 2x as much.  The initial whammy and then the additional cost of paying the interest at credit card rates.  I set up an automatic transfer to a savings account for myself for $50/month.  Thinking of it as a bill helps rationalize it over say paying $50 more on a mortgage payment.

I have a savings account that gets used and then replenished but when the 35 year old furnace breaks in the middle of winter you have to get an new one now rather than save up for it.  And this job is the first one I have earned enough to have a savings account.  A lot of people living from pay check to pay check don't have that, it is a luxury.  If you start saving when you are young, make it a habit and you get help from your parents, then you can manage better when you get your first full time job, but most parents don't even have their own savings account so don't even think of helping their children learn to save.   Upper middle class you can do that, middle class if your are smart you will find a way.  Lower middle class and lower class, there is never enough money to do that.  And now days a college education is not worth the money.  It would be a good rule of thumb to not get a student loan unless you know your degree will give you six figures in less than 5 years.  Anything else just keep you stuck, like someone said the student loans are the new debt, replacing mortgages.

[Gromdor]

5 minutes ago, Desertrat56 said:

I have a savings account that gets used and then replenished but when the 35 year old furnace breaks in the middle of winter you have to get an new one now rather than save up for it.  And this job is the first one I have earned enough to have a savings account.  A lot of people living from pay check to pay check don't have that, it is a luxury.  If you start saving when you are young, make it a habit and you get help from your parents, then you can manage better when you get your first full time job, but most parents don't even have their own savings account so don't even think of helping their children learn to save.   Upper middle class you can do that, middle class if your are smart you will find a way.  Lower middle class and lower class, there is never enough money to do that.  And now days a college education is not worth the money.  It would be a good rule of thumb to not get a student loan unless you know your degree will give you six figures in less than 5 years.  Anything else just keep you stuck, like someone said the student loans are the new debt, replacing mortgages.

I understand.  The system is designed to keep you in debt and thus a revenue source for the banks after all.  There is a reason why the Bible, the Torah and the Koran all say credit is bad.

[Dark_Grey]

10 minutes ago, spartan max2 said:

Except millennials would also like to be able to buy houses at some point.

You have to be in the right position to pull the trigger. Many want to buy a house as simply the next stage of their adult life but not all are financially in a good place to do so. House prices are about to drop with interest rates (bad/slow economy up here,) so maybe a few millenials can capitalize on that. Rich Chinese are creating a huge inflation in Western Canadian house prices. Vancouver and Toronto are starting to resemble LA with $1.5 million condos next to homeless "tent cities"

[Dark_Grey]

2 minutes ago, Gromdor said:

I understand.  The system is designed to keep you in debt and thus a revenue source for the banks after all.  There is a reason why the Bible, the Torah and the Koran all say credit is bad.

Jesus hates usury and "money lenders"

[Gromdor]

1 minute ago, Dark_Grey said:

You have to be in the right position to pull the trigger. Many want to buy a house as simply the next stage of their adult life but not all are financially in a good place to do so. House prices are about to drop with interest rates (bad/slow economy up here,) so maybe a few millenials can capitalize on that. Rich Chinese are creating a huge inflation in Western Canadian house prices. Vancouver and Toronto are starting to resemble LA with $1.5 million condos next to homeless "tent cities"

Yeah, a recession will drop prices.  The problem is exactly what you say though.  Rich foreign investors coming in and buying up the houses when it is cheap.  The average Joe who doesn't have the money now, will be worse off during a recession and still unable to afford it. 

[+Desertrat56]

4 minutes ago, Gromdor said:

I understand.  The system is designed to keep you in debt and thus a revenue source for the banks after all.  There is a reason why the Bible, the Torah and the Koran all say credit is bad.

Yep.  And the sooner most of us cut up the credit cards or at least don't keep them in our wallets, mine stays in the drawer, the better off we can be.  It is a trap and like someone else said, you have to have a credit score and in order to get one you have to have debt (a credit card or something else).  The system is rigged.  I have known only one person who never had debt.  He is my age and he saved up and bought a mobile home with cash.  Then saved up, sold the mobile home and bought a house with cash.  He had no kids or wife so it was easier to do it, but his parents taught him "if you don't have the money, you don't buy it." 

[Dark_Grey]

2 minutes ago, Desertrat56 said:

Yep.  And the sooner most of us cut up the credit cards or at least don't keep them in our wallets, mine stays in the drawer, the better off we can be.  It is a trap and like someone else said, you have to have a credit score and in order to get one you have to have debt (a credit card or something else).  The system is rigged.  I have known only one person who never had debt.  He is my age and he saved up and bought a mobile home with cash.  Then saved up, sold the mobile home and bought a house with cash.  He had no kids or wife so it was easier to do it, but his parents taught him "if you don't have the money, you don't buy it." 

"Cash is king". My old man repeated that mantra until we were all sick of hearing it. Your friend with no debt won the game - he beat the system because he never owed money to the banks. That's the secret. We are sold a lie that a posh lifestyle means you are a winner but the true winner is the man who outright owns everything he has, even if it's modest.