Kayly Gerowski shares her insight on Gen Z and millennials’ spending trends in Yahoo Finance story: “Life Events That Millennials and Gen Zers Are Choosing To Go Into Debt For.”
Compared to older generations, millennials (ages 24 to 39) and Gen Z (ages 8 to 23) have less debt — though this is likely just because they’ve had fewer years to accumulate debt. A 2019 Northwestern Mutual study found that Gen X reported the highest levels of personal debt with $36,000 on average, followed by baby boomers at $28,600, millennials at $27,900 and Gen Z at $14,700. Based on some of the reasons why these younger generations are going into debt, it would seem that they are choosing to go into debt.
I talked to financial experts about the life events millennials and Gen Z are going into debt for, and what they should be doing to minimize and manage this debt.
Last updated: March 19, 2020
Why Are Younger Generations Racking Up Debt?
“Debt can be an important tool towards managing opportunities, and for Gen Z and millennials, life experiences like weddings, trips, educational classes and philanthropic support are all viewed as very worthy and satisfying ‘investments’ compared to previous generations,” said Kayly Gerowski, associate director at Pathstone. “What this means is that old metrics of allocating approximately 33% of income towards housing is now being reduced to accommodate ‘wants’ elsewhere.”
Here are the “wants” and major life events that are sending millennials and Gen Zers into debt.