1 Out of 5 Millennials Think They Can Never be Debt-Free
Average Millennial’s Debt
A study published last year revealed that an average millennial, i.e., a person between the age of 18 and 34 had personal debt amounting to about $36,000 and that is to the exclusion of home mortgages.
According to another report, just above 60% of the millennials, (in this instance those between 18 and 37) who currently have debt do not know the time neither do they know if they will ever have the ability to pay off their debt successfully.
The statistics include approximately 42%of millennials who do not know the exact time they expect to pay off the debt and about 20% of them expect that they won’t pay off their debt till they die.
The data, however, has a couple of bright spots. Among the people between the ages of 18 and 30 who specifically have credit card debt, 79% of them said they already have plans to wipe off their credit card debts. On an average, they said they expect that they’ll no longer have debt when they are 43 years.
However, several young people still feel trapped. The feeling of being trapped isn’t limited to these young people as older people also reportedly have a similar feeling. More than 35% of those who are above 73 have predicted that they will never be debt free.
According to industry analyst with CreditCards.com, Ted Rossman, and debt does not have to be for life. However, one may require to plan and put in a good level of hard work. According to Rossman, it is very possible for everyone to be debt free.
One good way to handle this is to set up a plan. According to Dietrich Knauth, (34 years old), he picked up different freelance jobs last year and restricted his spending to approximately $2,000 per month.
There were different times when he had to eat jelly sandwiches and peanut butter till he had no more peanut butter and he had to make do with eating just jelly sandwich. He celebrated his birthday by repaying the last of his student loan debt ($117,000).
Also, Guen Garrido (32 years old) was able to successfully to repay the debt of $68,600 within a period of 3 years after he got inspired by the snowball method as well as YouTube tutorials. Also, it helped her that she fixed a target date when she wanted to pay off all that she owed.
Garrido opined that several people already function under the belief that they will never be debt-free, as such they never attempt to work towards being debt free. However, as soon as you fix the date, she said you begin to think things are possible.
Also, being creative can be effective. John Sweat (27 years old) has temporarily made his van his new home, and he is expecting that he would be debt free before next winter ends.
Sweat said that he spent the better part of his life feeling strapped, but he now feels more financially stable, competent and also better set up than he had ever been. Another study revealed that 2 out of 10 people invested 50% of their whole income into paying off their debt. If you are unable to do that, you do not need to panic. Experts have advised that 5% of your entire income should go into offsetting your debt.
Considering Other Financial Goals
Working with a plan is undoubtedly the first step when you want to offset your debt. According to Rossman, millennials would find the comprehensive approach more appealing. He said one should fully consider the finances.
According to Rossman, there is always hope with student loans as a lot of student loans come with easily understandable and built-in expiration dates. However, even though educational debt constitutes the largest position of an average millennial’s entire debt, it doesn’t change the fact that it is just a type of loan.
Rossman also recommends that one should plan for the future and that may entail making big purchases like a car or home and also other expenses like retirement. Set aside a fixed part of your regular income. Experts have recommended that you should set aside a minimum of 10% for your retirement and not just putting all you have into paying off an educational loan.
More in Loans & Mortgages
Pandemic Taking Its Toll On Your Career? Follow These Experts Tips to Land Your Dream Job While Being Stuck at Home
Are you currently in the market searching for a job? Well, then you’ve got your work cut out for yourself as...August 24, 2020
Stay Clear of These Major but Invisible Mistakes When Investing
People work to accumulate savings for the future. Making investments is also a part of this saving plan so that they...August 24, 2020
Have You Chosen Your Beneficiary Yet? Here’s Why It Should Be Your Top Priority
Do you remember choosing a beneficiary when signing up for a bank account or purchasing any asset? You must have wondered what it...August 24, 2020
Financial Mistakes Most Millennials Regret Making During College
Getting ready for college could be one of the highlights of your life, personally and professionally. A lot of opportunities open...August 17, 2020
Tips to manage Stress and Be Careful Once Offices Resume Post Lockdown
There would hardly be anyone who’d not be excited to get back to work after the Coronavirus lockdowns are lifted. It’s...August 17, 2020
Struggling to Figure Out Your Next Career Move? Here’s How You Can Keep Your Professional Progress On Track With These Expert Insights
We know that planning your next career move is the last thing on your mind right now. With companies closing and...August 16, 2020
Students Looking for Extra Income Can Apply for These Three Online Jobs
Students usually have limited budgets. And with unexpected expenses threatening to mess with those funds, most of them are now considering...August 15, 2020
The Five Most Important Things You Need To Consider When Getting a Personal Loan
A personal loan means borrowing from a lending entity, may it be a bank or some other credit provider. It’s...August 15, 2020
Struggling to set your Career straight? Take a look at These Tips that are Sure to Help
The pandemic has created havoc in many industries, and thousands of people are left without jobs. If not entirely out of...August 15, 2020