WSJ: Millennials are in serious debt, more than any other age group

[NetMapel]

While here in the Netherlands this issue does exist in some form, it just seems much more problematic in America. What is so different in America that causes this issue to balloon compared to other capitalist countries?

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I don't know if it is indeed objectively worse in the US, but if I have to take a guess, I think it boils down to that certain necessities cost more in the US while non-necessities are cheap.
- You need a car and all the associated costs in a lot of places in the US to get anywhere.
- Costs a lot to live in the bigger urban area like Amsterdam. But in the US, land use and zoning can be atrocious that perpetuates these high costs
- Advance education can be very costly due to tuition and so on.
- Healthcare that I don't think I need to go further in.

Now, compare to things that are cheap like electronics, fast food, toys, and other random stuff. To me it just seems like the priorities are just a bit upside down there in terms of what is incentivized systematically. Though there are aspects that I think can and should be done better on an individual basis, sometimes that just may not be enough when facing this flawed system.

 

[teruterubozu]

Okay, I'm all on the "there are certain areas of the country where money goes quickly" but no, someone making 400k isn't struggling. Unless they are just atrocious with money.

Come on now.

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It's still in the range where a medical issue or two can totally wipe you out in the US.

 

[Apathy]

Do you have a car payment?

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Nope. I don't drive. My gfs car we paid off a few months ago

 

[pbayne]

Thankfully no real debt unless you are counting mortgage/student loans. At least in the uk student loan is pretty manageable and mine is nowhere near as big as others.

 

[Booshka]

I don't know if it is indeed objectively worse in the US, but if I have to take a guess, I think it boils down to that certain necessities cost more in the US while non-necessities are cheap.
- You need a car and all the associated costs in a lot of places in the US to get anywhere.
- Costs a lot to live in the bigger urban area like Amsterdam. But in the US, land use and zoning can be atrocious that perpetuates these high costs
- Advance education can be very costly due to tuition and so on.
- Healthcare that I don't think I need to go further in.

Now, compare to things that are cheap like electronics, fast food, toys, and other random stuff. To me it just seems like the priorities are just a bit upside down there in terms of what is incentivized systematically. Though there are aspects that I think can and should be done on an individual basis, sometimes that just may not be enough when facing this flawed system.

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And our economy measures GDP and consumer spending power as more important than actual Human Development indexes. Americans can spend plenty of money on consumable and largely superfluous goods, but their actual gains for quality of life are pretty terrible. Life Expectancy, Literacy, Maternal Mortality, Childhood Poverty, Co-morbidities, Commute Times, Vacation Time, Food Insecurity, Housing Insecurity, Carceral rates, Debt, on and on and on. All of those metrics the US is a pretty trash (developed) country unless you are making ~250K, which is also funnily enough the income where the benefits of wealth start to fall off, and then it becomes a severe detriment to society for people to earn more than that.

 

[Forerunner]

Besides a car payment, I have no debt. I joined the military after high school and as long as you're not blowing your money; it's enough. However, a lot of young guys went and got their Charger or Camaro and ruined themselves from the get go. After my enlistment, I moved in with my parents and went to school (GI Bill and all that good stuff). After graduating, I started to work for the government (stable employment). I then lived with my parents for a few more years before leaving.

I owe my parents a lot, I definitely wouldn't be where I am financially without their advice or help.

 

[BreakyBoy]

I don't know if it is indeed objectively worse in the US, but if I have to take a guess, I think it boils down to that certain necessities cost more in the US while non-necessities are cheap.

To me it just seems like the priorities are just a bit upside down there in terms of what is incentivized systematically. Though there are aspects that I think can and should be done better on an individual basis, sometimes that just may not be enough when facing this flawed system.

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This is definitely part of it. While I (mostly) stand with our anti-capitalist friends, a lot of it is absolutely exacerbated by the consumerist culture. And although consumerism doesn't require capitalism, it sure as hell gets reinforced by it.

On the one hand it's true that more financial literacy would be good, and would help people make better long-term decisions.

But on the other hand it's hard for me to pass judgment on someone who probably overspends on travel, retail therapy, or regularly going out to have drinks with friends. That strategy is often a more cost effective way for them to maintain some level of mental health and happiness than paying out of pocket for the mental health care they actually need.

Add on top of that the societal push to consume more and keep up with your (desired) peer group who are also financially underwater.

So yeah, the incentive structure in the U.S. (and other Americanized countries) is completely fucked.

 

[Falchion]

This are certainly bleak for this and later gens financially.

 

[deftones r cool]

8k on my car
100k on my house

No other debt

I feel blessed, honestly, and do my best to live within my means

 

[Adventureracing]

Thankfully no real debt unless you are counting mortgage/student loans. At least in the uk student loan is pretty manageable and mine is nowhere near as big as others.

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I can't see why you wouldn't. That is often peoples largest debt and with house prices so high and interest rates sky rocketing this is one of the big sources of debt.

 

[Davilmar]

I have some medical bills left to pay, tens of thousands in student loans, and a 2021 RAV4 to pay off (even though I traded my old car). So, this is hella accurate.

 

[AMAGON]

 

[PAFenix]

They'll be fine if they start skipping breakfast.

/s in case it wasnt clear

 

[Culex]

I just know my household is gonna have to bring in 300-400k just to have a middle class life with my debt payments. My debt payments when I graduate with my PhD will total probably $3000-3500 per month.

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I fail to see this.

We are making a combined 150k gross now between my wife and I, and we finally feel like we are not having to worry about ANY bills. More than double that? There is no way you would have to make 400k and have to worry. That's probably close to 15k MONTHLY NET INCOME. If you cannot make that work with a 3500 a month payment, you are doing something TERRIBLY wrong.

 

[Dr. Nothing Loud]

okay fine I'll share.
Thank god my husband and I will be at a 200-500k/yr household in a year when I graduate cuz this much debt being accrued has been rough.

Millennial here (30s)
160k in student loans (BS+PhD)
100k in cc debt/business startup expenses (some of it currently at 20-30% interest but it's being managed down to much lower rate soon thankfully)
630k left in mortgage w PMI w husband
Zero retirement, zero savings
My husband has 35k in student debt for his MEd
Need 7k for his jaw surgery insurance would only partially cover.
Oh yeah and 12k on our car that we had to get a second loan on during a health catastrophe last year.
Rate my debt: URFUCKED/10
🏆🥇👑💩💩💩

I laugh because crying feels pointless.

 

[Eros]

do mortgages count as debt? i have that, but that's it. i bought my vehicle straight up off a friend of the family, and my wife and i are pretty frugal. school is something i wanted to go back to (i have an AA from community) but i'm not sure if i'll ever be able to do it. no student loan debt tho.

 

[Deleted member 128704]

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You obviously didn't pay for the rights to use that image here and don't blame your student loan payments, dog.

 

[Culex]

do mortgages count as debt? i have that, but that's it. i bought my vehicle straight up off a friend of the family, and my wife and i are pretty frugal. school is something i wanted to go back to (i have an AA from community) but i'm not sure if i'll ever be able to do it. no student loan debt tho.

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See my previous post about this in this thread, so yes, but with an *.

 

[TheMadTitan]

All of my debt is credit card debt I couldn't pay because I got hit hard by unemployment years back and by time I got employed, my credit score cratered to the point where even paying it all off then wouldn't have helped, so I just let it sit and it's only now really falling off. And what hasn't fallen off due to time is now at the point where I can challenge it on my credit report and no one probably has the exact details on it, so it's going to evaporate. Already got one ding off of my report that way, gonna aim for a couple more and then everything else will be gone by the end of the year.

After that, it's just my car. Anything else I'm using credit for gets paid off since it's small amounts.

 

[Culex]

okay fine I'll share.
Thank god my husband and I will be at a 200-500k/yr household in a year when I graduate cuz this much debt being accrued has been rough.

Millennial here (30s)
160k in student loans (BS+PhD)
100k in cc debt/business startup expenses (some of it currently at 20-30% interest but it's being managed down to much lower rate soon thankfully)
630k left in mortgage w PMI w husband
Zero retirement, zero savings
My husband has 35k in student debt for his MEd
Need 7k for his jaw surgery insurance would only partially cover.
Oh yeah and 12k on our car that we had to get a second loan on during a health catastrophe last year.
Rate my debt: URFUCKED/10
🏆🥇👑💩💩💩

I laugh because crying feels pointless.

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You're living the normal life of a Resident/Dr. It's normal to have this all paid off by 40. After that, you're in the top 5% of all earners in the US. It's all in how you budget. Your first mistake was taking out a million dollar mortgage.

 

[Dr. Nothing Loud]

You're living the normal life of a Resident/Dr. It's normal to have this all paid off by 40. After that, you're in the top 5% of all earners in the US. It's all in how you budget. Your first mistake was taking out a million dollar mortgage.

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¯\_(ツ)_/¯ heh it's Seattle, we actually feel lucky given our mortgage was snagged right before interest rates climbed, a 2.6% mortgage. We got a steal on this townhouse too and didn't have to bid with anyone and it's brand new—moved out of our condo which was much less and old, but we had to get out.

 

[Culex]

¯\_(ツ)_/¯ heh it's Seattle, we actually feel lucky given our mortgage was snagged right before interest rates climbed, a 2.6% mortgage. We got a steal on this townhouse too and didn't have to bid with anyone and it's brand new—moved out of our condo which was much less and old, but we had to get out.

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Still - 15k estimated NET income is nothing to sneeze at @ 300k - 400k gross income. I'd be curious of your monthly budget. I do this for a living as part of my hybrid bank job.

 

[DevilMayGuy]

do mortgages count as debt? i have that, but that's it. i bought my vehicle straight up off a friend of the family, and my wife and i are pretty frugal. school is something i wanted to go back to (i have an AA from community) but i'm not sure if i'll ever be able to do it. no student loan debt tho.

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Net the amount you owe against the property value. If you're underwater, it's debt. Otherwise it doesn't really fit the bill as far as destructive debt like credit card debt IMO

 

[bremon]

okay fine I'll share.
Thank god my husband and I will be at a 200-500k/yr household in a year when I graduate cuz this much debt being accrued has been rough.

Millennial here (30s)
160k in student loans (BS+PhD)
100k in cc debt/business startup expenses (some of it currently at 20-30% interest but it's being managed down to much lower rate soon thankfully)
630k left in mortgage w PMI w husband
Zero retirement, zero savings
My husband has 35k in student debt for his MEd
Need 7k for his jaw surgery insurance would only partially cover.
Oh yeah and 12k on our car that we had to get a second loan on during a health catastrophe last year.
Rate my debt: URFUCKED/10
🏆🥇👑💩💩💩

I laugh because crying feels pointless.

Click to shrink...

500k a year? You'll be fine. You'll even have money left over for a wild PC build. At very minimum you have a CHANCE of getting unfucked at the end of your education. Fuck, you have a mortgage, so you're already in the hamster wheel that rolls towards net worth, instead of the hamster wheel of rent.

Your debt is probably thread-topping but ironically you're in a much stronger financial position than anyone in this thread commenting on posts being "tone deaf" because those people don't have your education, or even the credit available to attempt to get your education.

 

[Lightjolly]

Luckily have no debt, but thats because I haven't used a credit card like ever, though I guess I should for the benefits. Shame I only started really accumulating wealth slowly now in my late 20s but I'm very careful not to spend anymore than 25% of what I make weekly

 

[Aselith]

That said, I'm very lucky and have zero debt. I make all my purchases on various credit cards but always pay them off completely before they're due.

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Exactly, the younger generations are currently being milked by older generations for retirement income and/or corporate profits. You're not meant to escape a cycle of debt and rent payments.

 

[Cloud-Hidden]

Debt-free millennial here.

Dave Ramsey is an absolute tool but his baby steps work if you follow them exactly. It took me about two years to pay off my student loans and car. Didn't have any credit card or medical debt. I use credit cards but pay off fhe balances completely about twice a month, so they're basically debit cards.
I had a very low income as a freelance writer, but for one of those years I lived with my parents so it evened out.
Basically I just said no to everything but the necessities for a couple of years. I didn't have a lot of fun, but it was worth it.

 

[Soda]

I'm extremely thankful we're now debt free. We paid off student loans (about $45k) over 5 years and now we're just saving for a large house down payment.

 

[Belfast]

I haven't been in debt in several years, make decent money in a DINK household and still feel nowhere near able to live the lifestyle previous generations seem to have enjoyed.

 

[GamerJM]

I have no debt but I also come from a well off family who could pay for college which seems to be the main source of debt for a lot of folks. If that wasn't the case I'd probably be in debt at one point, though I guess I could pay off my hypothetical student loans at this point since I've lived at home with my parents without any major costs of living for my 20s so I've saved up multiple hundreds of thousands.

 

[DrEvil]

38 here.

No kids, have ~150k left on my mortgage to pay (but my home is worth far far more than what's left / what I paid for it originally), should be done with that in about 3 years.

No other debt, with about 25k in liquid savings.

I had to pay my own way through school and everything else, no handouts from my parents but I always knew the value of saving and the dollar.

I'm lucky to have bought my home when I did and have the job and salary I do.

 

[Darren Lamb]

I'm 33 and yeah, this tracks.

My wife and I have been pretty fortunate until now. If you don't include the mortgage, we only have student loan debt, and most of it is mine. I'll be done in my mid-40s but I'm only paying 200/month for my 25k balance of private loans, and hers will be hopefully forgiven by Dark Brandon.

We're going to try and get pregnant this year though, and therefore I need to find 3k/month somehow for childcare in this part of MA. All the important things (school tuition, housing costs, paying for kids) have been growing way faster than wages and no amount of skimping on avocado toasts will make up for it.

 

[Tuck]

No cc or student loan debt, but the mortgage is substantial and the interest rate hikes have been tough, though thankfully not enough to drown us.

 

[DJwest]

Even if I get a better paying job I'm still climbing towards a destination that vanishes endlessly before me

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That's exactly how I feel, trapped in the so called rat race. The pace at which houses and cars are getting more expensive far outweigh my savings/income rate. This is so discouraging, I'm losing hope

 

[hobblygobbly]

americans basically enter the workforce already in debt don't they? because of student loans, that's fucked up

because education is free in germany, when i finished studying at 23 with my masters, i entered the workforce (after also doing internship, which is paid), and first money I earned didn't go to any debt. I'm 30 and still have no debt and have close to 100k € in savings now, never used a credit card either, it's not needed for anything in germany, the "credit score" system in germany isn't based on credit but based on how reliable are you with paying normal bills like your rent, internet, etc - not taking on debt to "prove" you can repay. in general though i've never bought things I can't afford, if I want something I save the money for it.

 

[Deleted member 50498]

500k a year? You'll be fine. You'll even have money left over for a wild PC build. At very minimum you have a CHANCE of getting unfucked at the end of your education. Fuck, you have a mortgage, so you're already in the hamster wheel that rolls towards net worth, instead of the hamster wheel of rent.

Your debt is probably thread-topping but ironically you're in a much stronger financial position than anyone in this thread commenting on posts being "tone deaf" because those people don't have your education, or even the credit available to attempt to get your education.

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Quite an assumption on your part.

I retired at 38 as a climate scientist (PhD in mathematics), my wife is a doctor. When I was working, our monthly net income was ~$21k.

A few posts in this thread are tone deaf, so we can agree to disagree.

 

[Aske]

Yep, that's me. I was actually totally debt free until 2019, but then Covid happened. It's so tempting to be like "well shit, I'll never pay this off, guess I'll just live with it and what the hell, maybe I SHOULD buy that jetski because YOLO, right capitalism?"

 

[Captain_Vyse]

Thanks, boomers.

 

[bremon]

Quite an assumption on your part.

I retired at 38 as a climate scientist (PhD in mathematics), my wife is a doctor. When I was working, our monthly net income was ~$21k.

A few posts in this thread are tone deaf, so we can agree to disagree.

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I don't really see what part your replying to.

Yes, my assumption was that the people whose feelings were hurt by "tone deaf posts" were people who were in real financial trouble, not someone wealthy giving shit to people who are less fucked than others.

Definitely tone deaf, and then some wonder why there is no class solidarity.

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Oh, I see now. You are a wealthy person giving people shit. My mistake.

 

[Tendo]

Trigger warning. Suicidality. If this isn't appropriate lemme know I'll delete.

Spoiler

Hardest 8 years of my life. And I'm still not out of the woods. But at least stable. Graduating with 100k in student loans in 09 and having to take a 30k a year job for 5 years pushed me to dark thoughts many times.

People that don't know have no idea how oppressive and overwhelming it is at every moment. I felt guilty for buying food or putting gas in my car. I won teacher of the year and had to beg my parents for new tires to go to the interview for districts. My dad insulting and embarrassing me "it's cuz you buy all those damn video games!" Not knowing my budget even though I'd shared it many times. We didn't talk for over a year because of his behavior.

I even had a plan to make it look an accident so my parents would get life insurance to pay off my loans they co-signed on. Wrack on top credit card debt from an unhealthy and failing marriage. It's so offensive to hear people say "don't buy name brands you'll be fine! And other boomer tips. Bro I'm drowning here and instead of a life raft you're trying to teach me to swim from the deck of the boat. Much love to anyone still in it. I'm almost out. But I graduated what, 14 years ago? Jesus. What a great way to spend adulthood. Meanwhile my fucking asshole dad retires at 62 and acts like he's struggling and guilts me for not visiting more when I can't afford it. And insults people on unemployment and welfare because they are taking his tax dollars. While he doesn't work anymore. Fuck all the way off.

Well this woke up some feelings. Glad I got therapy today…

EDIT: On reflection this may read like "I struggled and worked hard and I'm fine"
1. I'm not. I'm just... Less insecure financially? I suppose?
2. It wasn't hard work. Of course I was working hard. Everyone in this thread was. Fuck that "work hard and it'll pay off" carrot on a stick. I got lucky. I'm very aware of that and thankful.

 

[GulfCoastZilla]

36 year old millennial here. Yep, it checks out. I'm in so much debt and I even have a full time job and no house though I do pay rent.

I see no way out of this.

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Honestly? If you could move home do so, pay off your debt with what would have been rent money.

A temporary unconvinced to live a better life in the future.

 

[Protome]

I might be debt free by the end of this year...but that's only because I don't own a house or a car. So uh, I'll probably be deeply in debt again next year.
Luckily I'm from a country that doesn't have tuition fees so my student loans were minimal and almost paid off, but a couple of rough years caused me stack up a bit of credit card debt that I'm finally paying off.

 

[maximumzero]

Only real "debt" I have is a house note that I'll be paying on for the next 28 years or so, but that doesn't mean I'm living like a Kardashian either.

 

[Addie]

I was completely debt free but just bought a house. Seeing that I'll be paying something for the next thirty years is slightly overwhelming. And since I'm always slightly too late to the party, I feel fortunate that I locked in 5.5% on a 420k note.

Need a car, though. And a fridge. And to keep my SO happy since they're heavily contributing.

 

[Silav101]

Barely a millenial here (december 1980) - 42 years old, 2 young kids, wife. Been living in the Netherlands since 1994. Recently sold my apartment I bought back in '09 and used that and my savings and investment windfalls over the years to buy my parents' home here. Mofos charged me general market price, jerks wahaha, though you shouldn't mix family and business anyway, as far as that goes.

Still have around 9k liquid in savings, but that's for absolute emergenices. Energy prices are kicking my ass lol.

Mortgage on the house will be done in around 3 years, and it's already a net profit, so I'm debt-free. There were a couple of years in my twenties where I fucked up hard and was essentially just a monthly bill away from living on the streets or moving back in with my parents. It got my ass in gear to properly manage expenses and re-focus on priorities.

It's doable, but it depends so much on luck+hard work to make it. It shouldn't have to depend on luck at all, for anyone.

 

[Dr. Nothing Loud]

500k a year? You'll be fine. You'll even have money left over for a wild PC build. At very minimum you have a CHANCE of getting unfucked at the end of your education. Fuck, you have a mortgage, so you're already in the hamster wheel that rolls towards net worth, instead of the hamster wheel of rent.

Your debt is probably thread-topping but ironically you're in a much stronger financial position than anyone in this thread commenting on posts being "tone deaf" because those people don't have your education, or even the credit available to attempt to get your education.

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That was my hope. I wouldn't have entered into some of this debt if I wasn't certain about my future earning potential (and my husband's), which thankfully with a dual title PhD in engineering and data science, I'm pretty set on.

 

[Gazele]

I definitely can't complain too much, as I've been very lucky in my life

My debt is mostly in my mortgage and car which is about 500k combined left (Bay Area is expensive), plus I just got laid off in January so relying on the wife who makes about half of what I do

Have enough savings to last about 6 months but the idea of not having an income then is pretty scary and obviously having to avoid any medical debts

 

[BrickArts295]

Thats gonna be me in a year or 2 since I'll be turning 30 and my folks are planning on moving. On one hand, cool I'll be living on my own but on the other hand, fuck I'll living on my own and in SoCal 😂

 

[fragamemnon]

It is mentioned in the article but the fact that many in that generation graduated college into the post-9/11 / dotcom bust recession or (far worse) the Great Recession is huge factor in overall wage growth because of the initial position in salaries, new hires competing fiercely with each other for job prospects that were rare compared to ones needing even just 1-2 years of experience.

The other shoe is the stasis of American life, the regulatory, professional capture, and citizen participatory government reforms of the 1970s making building for reasonable cost in reasonable timeframes impossible, so affordable transit, energy , housing . all of it is more scarce and expensive than it should be.

 

[Omegasquash]

I mean if we REALLY wanna dig into the WSJ, we should also follow their advice and skip breakfast.