Outstanding debt is expected to take a toll on the financial health of young professionals, particularly those in their 20s. According to a survey released this week by the PNC Financial Services Group, 60 percent of Generation-Y members feel stressed about outstanding debt, having grown up during a period of strong economic growth only to graduate into the worst recession in more than 60 years.
Due largely to student loans, twenty-somethings are one of the most heavily indebted age groups in decades. This, coupled with the need to save money, has made for a challenging financial lifestyle among members of Gen-Y. "Twenty-somethings are challenged with a balancing act between saving for the future and paying down their debt," said Shannon Johnson, director of consumer checking and rewards at PNC. "Though budgeting can seem overwhelming, Millennials have the luxury of time to develop a strategy and more resources than any other generation to better manage their money and achieve their financial goals." Even within the generation, however, debt levels appear to rise with age. On average, 20-somethings have $45,000 in total debt, but the figure ranges from $12,000 among ages 20- to 21-year-olds to $78,000 for 28- 29-year-olds. The data highlight new areas of business available to debt collection
firms. Not surprisingly, most of these dues are a result of education. More than half of respondents hold student debt throughout their 20s - more than any other category - followed by credit card, car loans and mortgages, respectively. While the recession certainly scared many Millennials into frugality and fiscal awareness, most do not seem worried about retirement savings quite yet. Only 13 percent of 20- to 21-year-olds claim they are currently saving for retirement. That figure rises to nearly half among 28- and 29-year-olds. "Millennials have more tools for financial management and education, online and on their smartphones, than any generation before them," PNC noted in a press released. "[They can] use online and mobile tools … to see all [their] accounts in one place, share advice, establish a budget and set up alerts to help with money management." So Gen-Y enjoys a wide array of resources to help better manage their finances, but many of the traits carried with them from their youth - entitlement, ambition, demand for work/life balance - many complicate frugal behaviour.