Does your financial situation have you feeling overwhelmed, financially unstable, and unsure of how you could possibly turn it around?
You’re not alone. People all across the country, especially young Americans, are experiencing the debt crisis and are looking for a way out.
Which is why we’re here to help.
In this guide, we’re exploring the American debt crisis, how it’s affecting younger Americans, and what you can do to overcome your debt — including a debt calculator to help you figure out the best way to tackle that debt.
Table of Contents
- How Many Americans are in Debt?
- How Much Debt is the Average American in?
- Young American Debt Statistics — Are Young Americans Obtaining More Debt than Previous Generations?
- The Top Types of Debt Young Americans Face
- Resources to Help Young Americans Become Debt Free
- Debt Payment Calculator
- Are You One of the Many Americans Struggling to Overcome Debt? Let CreditNinja Help You Take Charge of Your Financial Situation
How Many Americans Are in Debt?
If you’re dealing with debt, know that you’re not alone. In fact, 8 out of 10 Americans are dealing with some form of debt. In 2020, America’s population was an estimated 331,002,651 people — meaning that roughly 264,802,120 people in America are in debt.
The Pew Study of American Family Finances found the following statistics about Americans in debt:
- 80% of Caucasian households in America hold some form of debt
- 82% of African American households in American hold some form of debt; and
- 83% of Hispanic families in America hold some form of debt.
That’s an unfathomable amount of people dealing with debt. Seeing these percentages sparked our curiosity — we wanted to know more, and here’s what we found:
Residents of the following states have the highest amounts of debt in the country:
- New Jersey
- New York
But how much debt is the average American in?
How Much Debt is the Average American in?
The average American is in debt by an average of $90,460.00.
This debt ranges from personal loans, mortgages, car loans, student loans, and more. We’ll touch more on the types of loans later, but for now, let’s look at how much debt the average American is in based on generation.
As of 2020, the average person’s debt in each generation looks like this:
- Generation Z (people between the ages 18 to 23) owe an average of $16,043
- Millennials (people ages 24 to 39) owe an average of $87,448
- Generation X (people ages 40 to 55) owe an average of $140,643
- Baby Boomers (people ages 56 to 74) owe an average of $97,290
- Silent Generation (people ages 75 and older) owe an average of $41,281
You can see that Generation X has the highest average amount of debt — but are Americans going into debt at an earlier age than ever? What’s affecting the rising debt crisis Americans are facing?
We’ve done the research and found the answers so you don’t have to.
You’re Dealing With Debt and Want to Know — When Will You Be Out of Debt?
Dealing with debt causes many people increased levels of stress and anxiety. If you’re feeling this way reading this article, you’re likely looking for a way out of debt.
CreditNinja can help. Aside from the resources to help you overcome your debt that we provide later in this article, we’ve created a calculator to help you determine when you will be debt-free based on several factors, including the:
- Amount of debt you owe
- Interest rate on your debt
- Payment amounts you are making.
Young American Debt Statistics — Are Young Americans Obtaining More Debt than Previous Generations?
Although at first glance, the statistics mentioned above may point to Generation X having the highest amount of debt, the reality is that young Americans are falling into more debt faster than previous generations.
Millennials have seen a 22 percent increase in debt in just five years.
In 2018, the New York Federal Reserve Consumer Credit Panel reported that the debt among Americans between the ages of 19 and 29 years old exceeded one trillion dollars — making it the highest debt exposure to the youngest group of adults since 2007.
The bigger issue?
Younger generations, like millennials, have a much lower net worth than previous generations, largely due to the amount of debt they are racking up at earlier ages. Each Millennial’s net worth is an average of less than $8,000 — making them financially worse off than the generations before them.
But what are the top types of debt our younger Americans are facing?
The Top Types of Debt Young Americans Face
1. Credit Card Debt
It comes as a surprise to many that credit card debt is the most common, and highest, type of debt that young Americans are dealing with.
In 2019, millennials had an average balance of $1,527 in credit card debt — growing 40% from 2015-2019.
For many millennials, four out of every 10, expenses like …
- Utilities; and
… are the most significant cause of their credit card debt, while others say that emergency situations are the reason for their debt.
2. Student Debt
A report done by the Department of Education shows that millennials’ student debt is over 300 percent greater than other generations.
This report also shows that millennials alone are responsible for 497.6 billion dollars worth of the Nation’s student loan debt.
Could a lack of financial literacy/education be to blame for the student loan crisis plaguing younger Americans? It’s very likely.
Resources to Help Young Americans Become Debt Free
If only it were as easy as waving a magic wand, wishing your debts away, and *poof* they’d be gone.
Unfortunately, it’s not that simple for consumers — but there are resources to make your journey to being debt-free less overwhelming and stressful.
In the following sections, we’ll discuss the best resources to help you become debt-free and put more money in your pocket — instead of in the bank’s pocket.
Refinancing loans and/or credit card debt allows borrowers to replace their current debts with a loan with better terms. Refinancing means that the borrower (you) opens a new loan and pays off the existing debt with the new loan.
Refinancing oftentimes offers borrowers:
- Lower monthly payments
- Lower interest rates; or
- Convenient payment schedules
- And more.
Refinancing options are available for several types of debt, including:
- Student loans
- Mortgages; and
- Debt consolidation programs.
Create a Realistic Budget
It’s sad but true, many young Americans (less than 25 percent of surveyed Millennials) demonstrated the basics of financial literacy.
Millennials and most of Gen-Z haven’t been taught how to budget.
If this sounds like you, and you’re looking to overcome your debt, you can start creating a realistic budget by understanding what your wants vs. your needs are.
Ask yourself questions like:
- What is your monthly income?
- What are the payments (or fixed expenses) you are required to make every month?
- Where are you spending money on things you want instead of things you need?
- Is there somewhere that you can be cutting costs to put more money toward your debt?
Overcoming debt by creating a realistic budget is just one of the ways you can make your money work for you.
By creating a budget, you can also get a clear picture of what you can afford to put towards your debt — setting you up for success to begin calculating how long it will take you to pay them off.
Debt Payment Calculator
You’re starting to understand how important it is to create a budget and set yourself up for financial success, but figuring out how to get out of debt might still feel confusing and overwhelming.
Consider using a tool, like a debt payment calculator, to not only help you figure out how to get out of debt, but when you can expect to pay off your debt.
Using a debt calculator is a great way to motivate yourself to stay on track and possibly even pay your debts off faster.
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Are You One of the Many Americans Struggling to Overcome Debt? Let CreditNinja Help You Take Charge of Your Financial Situation
If you are a young American struggling with debt, know that you are not alone.
CreditNinja understands the trials and tribulations that life throws, even financially.
Whether you are looking for a debt calculator, refinancing options, loans, or resources to increase your financial literacy — CreditNinja is here to help you gain more confidence and find financial freedom.