Debt challenges all, regardless of boundaries

A wide range of economic and debt experts have studied the effects of debt on the generations. Spending and savings habits of the ‘Greatest’ generation, Boomers, GenX, GenY, and Millennials are as varied as the unique aspects of each cohort.

generational debt

  • The Greatest Generation and War Babies – This is the generation- 69 years and older- includes World War II veterans and women on the home front who stepped up to learn job skills and non-traditional trades that kept factories producing the goods needed to support the war effort. The best prepared for retirement with some of the strongest credit scores, the typical ‘Great’ planned and chose smart options that helped them avoid unnecessary debt. If they own mortgages, they are likely to be on second homes and equity lines of credit.
  • Boomers – The generation born between 1946 and 1966 carry heavier debt loads than their parents’ generations. Those fortunate enough to have worked or invested in dot-com and other tech booms and lucky enough to participate in the housing boom fare better than the rest of their cohort. This generation on average saved less and will face tougher retirements. Lifestyles will be downgraded once many leave the workforce. Lax decisions in youth will lead many in this generation to work well past traditional retirement years in order to afford the basics such as food and rent. Many Boomers took big hits in the recent global economic recession and face years of personal financial recovery.
  • GenX and GenY – This group faced some of the greatest challenges during the most recent economic recession. Experts that study financial trends estimate that members of this generation lost an average of 25 percent of their wealth. Many would have been in relatively young mortgages during the global financial crisis and likely faced difficult consequences of job loss and low financial reserves. Members of this generation may have a better chance of financial recovery over members of older generations.
  • Millennials – This group faces the greatest debt challenge. Crushed by student loan debt–the average is $27K post-graduation–and outstanding credit card balances, they face a weak job market that makes finding work to match the ballooning needs of financial obligations a genuine challenge. Many in this generation struggle to get a foot in the door after college or career school and rely more on the kindness of parents and credit cards because they are left out of our economic system. As a result, credit scores are weak making it all the more difficult to rent apartments, buy cars and homes, and start families, and contribute to retirement savings.

Financial pictures of all the generations are subject to market trends and regional and national economics. In boom times, everyone stands a better chance of eliminating debt challenges and restructuring futures to see a brighter, more positive and hopefully debt-free financial outcome. If you need help getting out of debt contact, Rescue One Financial, the debt management professionals.