Published On: Mon, Apr 1st, 2019

Average Debts by Age in America

While owing money can be intimidating, debt doesn’t necessarily have to be a dirty word. There are perfectly valid reasons for carrying debt, like financing an education, buying a home, making big-ticket purchases on credit, buying a vehicle, paying an unavoidable bill, etc. But, just like any other financial tool, it’s important for consumers to use debt to their advantage rather than letting it control their lives.

The danger of debt is that it commands a sizeable chunk of your income each month—and if you fall behind on payments, interest will only keep growing in the background. Unpaid debts eventually go to collections, which means consumers can face lawsuits and plummeting credit scores as a result.

There’s no one type of person most likely to accumulate debt—it transcends income levels, ages, geographic locations and more. The fact of the matter is that anyone can have debt in America.

Wondering how your financial situation compares to others within your generation? Here’s a rundown of average debts by age in America, as well as a handful of solutions for addressing debt proactively at any stage in life.

A Look at U.S. Debt: Average Amount and Type

Here’s a broad breakdown of average debt by generation, based on a survey for a Northwestern Mutual study and cited by CNBC:

  • Gen Z (ages 18-24): $22,000
  • Older millennials (ages 25-34): $42,000
  • Gen X (ages 35-49): $39,000
  • Baby boomers (ages 50+): $36,000

This progression makes sense, as people tend to take on more debt as expenses increase. Many people currently classified as older millennials are starting to make major purchases like homes and vehicles, as well as starting families. All these expenses can contribute to debt levels.

The progression of leading debt types also makes sense. Gen Z consumers cite student loans as their highest source of debt, then credit card balances. Older millennials cite credit card balances as their leading debt, followed by student debt and mortgages. Mortgages are the number one debt source for Gen Xers, followed by credit card, then a tie between student and auto loans. Finally, baby boomers also face mortgages, credit card bills and car loans in descending order.

The type and amount of debt you take on depends on many things. As evidenced by this survey, your stage of life inevitably impacts how much you borrow and for what reasons.

Eliminating Problem Debt at Any Age

There’s no perfect age for eliminating debt. You can tackle your debt at 22, 32, 42, 52 or any other age. The key is finding the best strategy for your needs. First, ask yourself: How much debt do you really have—and what kind? Once you know what you’re working with, you can try various debt relief options on for size.

Looking for practical advice on budgeting and paying down debt? Credit counseling through a non-profit organization could help you get organized and possibly lower your interest rates.

Struggling to keep up on payments for unsecured debt over $10,000? Enrolling in a debt settlement program may help you pay off significant debt for less. Of course, you must commit to depositing a set amount each month into a special account. Once you have enough funds built up, negotiators could start working with creditors to help you reach you reach a settlement. Read through Freedom Debt Relief reviews to get a feel for consumers’ real-life experiences working with a leading debt relief organization.

Have you built some equity on your home? Cash-out refinancing allows you to take out additional cash on your mortgage, which you can use to pay off more pressing debts. Then you’re responsible for paying off your elevated mortgage, albeit at a more reasonable rate with lower interest.

The average American has debt at every age. If you’re among the ranks of people within your generation facing various types of debt, consider your options for eliminating it sooner rather than later.

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