Millennials: Debt and Credit

On a recent Facebook IQ report that looked at how millennials aged 21-34 manage their money, results concluded millennials hate debt (I’m not really sure who would like it) and don’t like using credit cards either.

In my experience, most millennials don’t use credit cards (that aren’t their parents) and most don’t realize that you need to establish good credit score in order to be able to do things like take out a loan, buy a car or house, etc. Simply put, millennials probably hate debt because so many of them are in it after graduating college.

The Class of 2015 had the most debt in U.S. History. On average each student had $35,051 in debt according to Mark Kantrowitz, the publisher of Edvisors.com. This probably does not provide the strongest foundation for future savings or retirement planning. According to the IQ report, only 37% had a money management plan in place.

The report also revealed 86% save money each month but are less likely to invest it. These results may be because millennials were not taught to properly invest money unless they have some sort of business degree, considering simple money management/business courses are not required in high school. Another reason for this may be due to millennial’s experience with the Recession and their possible skepticism towards financial institutions.

Whether these survey results were due to general skepticism or lack of education, it’s important for millennials to understand the importance of a good credit score and establishing a future financial plan.

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