If you’re a 20-something, chances are you’re up to your eyeballs in debt.
A new study from PNC Bank shows the debt level of young people is going up through their 20s, not declining.
According to the PNC numbers, 20 and 21 years old have an average debt of $12,000. But by the time they reach 28 or 29, the average person’s debt load has ballooned to $78,000.
Now, you might be thinking, “Of course, it’s all about student loans!” But student loans only account for half of the debt load, according to a report I read in The New York Post.
Another quarter is because of credit cards. And though this isn’t spelled out in the report, I’m willing to bet that car loans also account for a sizeable chunk of that debt.
It’s not unusual for someone in their 20s, as they’re out working, to buy too much car at too long of a loan term at too high of an interest rate. And 20-somethings have also become infamous for using credit cards not as a method of payment, but as a mode of borrowing.
At the core of the problem is the level of financial literacy of our young people. Even whiz kids who work on Wall Street are clueless when it comes to everyday money things like personal finance.
If that sounds like you, you need to educate yourself. I provide just one single outlet for info, but there are other things out there you can grab onto, including sites like YoBucko.com that offer financial advice specifically geared to 20-somethings.
One piece of general advice. If you have lifestyle debt, you’ve got to rethink that. Maybe you can’t carry plastic going forward. You may be one of those people who need to live a cash existence so that you live can within your means.