Young adults having less debt overall than they did ten years ago should be a good thing.
After all, we at LearnVest prioritize paying off debt—especially debt with high interest rates, like consumer debt—above most other things.
But this time, lower debt levels imply not so much responsible spenders but more people who can’t afford to go into debt. It seems backwards, but acquiring higher forms of debt (like mortgages) actually requires a certain income. Anyone who has ever tried to get a loan knows that it takes money to get money.
CNN Money reports that debt among Americans under age 35 decreased almost 14% between 2001 and 2010 (while increasing 63% for those over 35). Currently, their levels of unemployment are higher than those of older workers and their stats on homeownership, car ownership and credit card spending are falling. The only expenditure rising among this demographic is student loans.
This reluctance to spend has been blamed, understandably, on the view a college graduate has of recession, unemployment and financial insecurity. Evan Feinberg, president of Generation Opportunity, a young adult advocacy organization, told CNN Money: ”Young people have less debt because they are less likely to live the American Dream—own a home, buy a car, start a family.”
While neither the stats nor the quote are particularly uplifting, remember this: Statistics and trends are indicative of larger patterns, but they don’t have to define your own actions. As long as you’re being financially responsible and using the resources available to you (for instance, the free Money Center or bootcamps), you’re free to pursue your financial goals however you see fit.