Young People Avoiding Credit Card Debt

Young people and Debt

Young people and Debt

According to new research, younger “millenials” (adults born sometimes in the 90s or later) have been avoiding credit card debt compared to slightly older people.  A bank in the UK found that people aged between 18-24 are carrying much less debt than those in the 25-30 age bracket, half as much in fact.

Almost 30% of the people in that 18-24 age bracket carry zero debt, not a single dollar!  That is highly unusual compared to older millenials and generation X adults who were more likely to carry more debt at that age.  Even the millenials who attended college were carrying less debt than older people at the same age.

There are a number of theories as to why it is so,but one of the leading ideas is that the Global Financial Crisis saw young people thinking a lot more about their financial security and watching the level of their spending.  Young millenials are still mostly positive about their futures though, with 75% thinking they will own a home within the next 15 years and most believing they will retire in their mid sixties.

About 60% believed they would also operate a business of some kind as well, so the outlook for the economy is pretty bright within this age group.  There seems to be a lot more financial maturity within this age bracket – they are aware of their finances, they don’t spend needlessly and they don’t go into debt easily, according to researchers.

To help those millennials who are struggling to avoid debt, here are the top financial skills every young person needs (according to Forbes):

  • Be stingy.  Don’t waste money on frivolous things like expensive coffees and take away food when you can instead make your own
  • Cook dinner at home.  Learn to cook and see if you enjoy it.  For many it’s a rewarding hobby, it can help you in your love life and you save money!
  • Find a good roommate.  It makes sense to split expenses as much as possible.
  • Get a good credit score.  The better your credit score is, the better the options available when you need to get a loan, get a credit card or a mortgage.
  • Watch the overheads.  Do you need all of the magazine subscriptions you have?  Wine of the month club? 1000GB Internet downloads?  Cancel expensive subscriptions to save money.
  • Always save.  Even if you only manage to squirrel away a little bit of money it is worthwhile.  Saving should be a life long habit.

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