Millennials have gotten a bad reputation of being careless, free, and wild. Little did people know that they are occupied with problems, too. In fact, they are stressed as well, especially when it comes to matters about money. According to a recent survey, they are the generation that is feeling the pressure the most.
The survey, which is part of The State of Our Money series, asked close to 2,100 Americans on their debts and financial health and it was found that millennials who have debts are stressed.
Over 670 of the respondents belong to this generation, who are 23 to 38 years old by this year. The report found that 41 percent have an auto loan while almost a quarter is burdened by a mortgage.
About 49.7 percent of those who have a mortgage are stressed while 50.7 percent of the respondents who have a car loan dealt or are dealing with stress because of it. However, millennials are feeling the strain more for student loans (28.4 percent of the respondents say they have this loan) and credit cards (51.5 percent).
The alarming result showed that 72 percent of those who have a student loan have experienced stress because of it, while it is 68 percent for credit card debt.
Main Source of Debt
Meanwhile, another study, Planning & Progress Study by the Northwestern Mutual, has proven what the main source of debt of millennials is. While young professionals and fresh graduates feel the brunt of student loans nowadays, it is not actually the biggest sum they need to pay.
It surveyed 2,000 Americans: 441 baby boomers, about their debt situation, 503 Gen Zers, 595 GenXers, and 672 millennials, asking the respondents the amount of debt, its source, and how much of their money goes to paying what they owe.
A quarter of the millennials said they have the biggest balances on credit cards. Fifteen percent shared it was their mortgage while 10 percent said student debt. Interestingly, a small piece of plastic proved not to be harmless at all for the generation as 22 percent of whom didn’t know the interest rates they are slapped with.
What does this say? Northwestern Mutual’s senior director of planning Emily Holbrook said that this was a reflection of how people still have not learned to find the equilibrium between spending now and saving for the future.
Worse, the millennials are facing more debt than their parents did, a MagnifyMoney study showed, which explains why the generation is stressed out.
A report by Merrill Lynch Wealth Management, which analyzed the answers of 2,700 Americans from 18 to 34 years old, showed that 60 percent of those surveyed see being debt-free as the ultimate financial success while only 19 percent define it as being rich. While paying all debts sounds a low form of achievement, it obviously remains a difficult goal to accomplish nowadays.
Another hurdle millennials must face on top of these stressors is to save big if they want to retire comfortably.
According to the University of Pennsylvania’s Wharton’s Pension Research Council’s executive director Olivia S. Mitchell, the young adults must set aside about half of their income to experience a secured retirement.