About 20% of Millennials Likely to Die Before Clearing Debts
Millennials form a crucial part of the country’s demographic. Data released by Northwestern Mutual’s study on the development of the economy shows that these individuals aged between 18 and 34 years have accrued about $36,000 worth of debts. Crucially, their study reveals that this debt has not factored in home mortgages in the mix.
Millennials aside, such huge debt can be equally crushing for many people out there. What’s more worrying is the revelation by one CreditCards report that about 60% of millennials with massive debts remain unsure about when they are likely to pay off their debts. This figure takes into account about 42% of millennials without a clue of when they’re likely to sort out their debts.
It’s not all doom and gloom though. Some of the data shows that some individuals in the 18-30 age bracket, about 79% actually have elaborate plans to clear out credit card debts. As divulged by CreditCard.com, these millennials are quite optimistic about the prospects of clearing all their debts by the time they get to 43.
All the same, there are plenty of young people who remain uncertain about their prospects. In truth, a large fraction of the older generation faces the same predicament.
Laying the Ground Work
According to Ted Rossman, one of the brains behind CreditCards.com, debt doesn’t necessarily have to be a bad thing. Rossman did share that to effectively tackle debt, one has to lay some groundwork in order to be in the clear. Most importantly, he pointed out that everyone has the ability to get out of debt at their own volution.
In a story covered by CNBC, one Dietrich Knauth, a millennial, shared that he devised a plan in order to clear his debts. He recalled that he picked up a couple of freelance jobs and began putting a cap on his spending habits. In the end, he was able to spend no more than $2,000 per month.
While his story sounds rosy, Knauth divulged that there were a couple of months where he was forced to survive on the bare minimum. At times, he resorted to eating peanut butter and jelly sandwiches. When he was out on peanut butter, he would simply eat the sandwiches with butter as the spread. His strategy was so effective that he was able to clear his $117,000 student loan in record time by the time he became 34 years old.
Another story by CNBC showed the beauty of getting creative. After being plagued by student loans for a while, John Sweat, a 27-year-old, resorted to moving to his van in order to save on rent monies. In his story, he shared that by his estimates, he is likely going to be living debt-free come the end of winter 2019.
However, researchers running the study adviced that this should not stress those who are unable to make such major sacrifices because of insufficient funds.
Why? For starters, the American Consumer Credit Counselling actually recommends 5% of your salary to be the standard operating rate that you need to dedicate towards clearing your debts.
Don’t Forget Your Other Financial Commitments
Rossman opined that while having a plan plays an integral part towards clearing debts, it’s also advisable for millennials to think big about the future.
He advises millennials to use some tunnel vision perspective when reviewing their finances. He opined that while student loans feel like some extra burden, there’s no need to despair. Rossman shard that the good news with student loans is that they have easy to comprehend, pre-configured expiration dates.
As stressful as student loans may be, Rossman believes that millennials need not only focus on student loans as the only loans needing their attention. Instead, he pointed out that they need to make preparations on how they were going to sort out their futures once they take on new financial commitments like home mortgages, cars, school fees, and retirement dues.
While on the topic of other financial commitments, Rossman advises millennials to put aside 3-6 months of their living expenses somewhere safe on the side for emergency purposes.
David Bach, one of the pioneers of AE Wealth Management, echoed Rossman’s sentiments by sharing that while the 10% figure may sound like much, it’s really not. He shared that all one needs to do is start off small before committing a big chunk of their paycheck to a dedicated account.
More in Loans & Credit
Nick Jonas and Priyanka Chopra Start a Chapter in $6.5 Million Luxury Villa
To be honest, 2018 was filled with bitter-sweet moments for Hollywood where many celebrities got engaged or married while others ended up in ugly...February 14, 2019
L’Oreal Cosmetic Sales Rises on The Back of Strong Chinese Demand
Chinese Shoppers’ Demands The increased demand of Chinese consumers for luxury skin products, particularly creams contributed to L’Oreal’s success in outperforming...February 13, 2019
Best Ways to Cut Down Credit Card Debt That You Must Know
The present economy means that a lot of people have maxed their credit card out, but the problem is that, even...February 13, 2019
Justin Bieber Proves Family Comes First With a Surprise $850,000 Home
Some of the biggest names in Tinseltown know how their parents struggled to raise them. Many of these celebrities didn’t break through...February 13, 2019
Check Out John Travolta’s Bizarre Home You May Not Want to Live In
Not every celebrity owns homes we would want to buy. In fact, some celebrities’ homes are so bizarre that you may not...February 12, 2019
Inside Kris Jenner’s Secret Hidden Hills Home No One Has Ever Seen Before
Over the years, Momager Kris Jenner has watched her daughters become wealthy and influential. Thanks to Keeping Up with the Kardashians,...February 12, 2019
Look Inside Bradley Cooper’s MASSIVE $13 Million New York Townhouse
Poor Bradley Cooper had to face embarrassment at the Oscars because his directorial debut in A Star is Born was snubbed by the...February 11, 2019
Research Shows Women are Better Investors
A quick look at Wallstreet will have you convinced that men are better investors than women. The same applies when you...February 11, 2019
Retirement Income Seekers Are Now Turning to Annuity Purchases. And This Is Why…
Individuals are finally buying annuities once more, and for a number of solid reasons. A couple of years ago, there was...February 11, 2019