Millennials Are More Than $100,000 in Debt: 2022 Data

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  Written by Jaime Dunaway-Seale

Debt-Free Millennials | Millennials’ Credit Card Debt | Average Credit Score | How Student Loans Impact Millennial Debt | Millennials’ Housing Expenses | Millennials’ Savings | How Millennials Spend Their Money | Millennials’ Money-Saving Habits

Millennials were alive during the economic prosperity of the 1990s, but today, they are America’s poorest generation. While millennials aren’t amassing wealth at the same rate as previous generations, they’re also sinking deeper into debt.

Nearly three-fourths of U.S. millennials (72%) have some form of non-mortgage debt, with the average millennial owing $117,000.

A majority of millennials (63%) believe it will take them one to five years to pay off their debt. However, nearly 1 in 10 (9%) think it will take them more than 10 years, and 1 in 16 (6%) reckon they’ll never pay it off.

Millennials trace their financial struggles to the 2008 economic crisis, when the oldest members of the generation graduated into a market with few jobs available. The stagnant economy depressed wages, leading to lower lifetime wealth and delayed milestones, such as marriage and homeownership.

Millennials — now in their prime working years — were steamrolled again in 2020 when the pandemic-induced recession wiped out stock market gains, retirement savings, and emergency funds built in the previous decade.

It’s no wonder 41% of millennials feel pessimistic about their finances.

The sentiment is particularly strong among “geriatric millennials,” those born between 1981 and 1985. Although they tend to make more money than younger millennials, they are 25% more likely to feel very pessimistic about their finances.

With a staggering debt burden that makes it difficult for all millennials to plan and save for the future, nearly 1 in 3 (32%) regret going into debt.

To learn more about their economic situation, we asked 1,000 millennials about their finances, savings, and credit history to provide a clear snapshot of how debt afflicts this generation.

90% of Millennials Have Had Non-Mortgage Debt

Just 10% of survey respondents have never had debt, meaning 90% of millennials have had non-mortgage debt at some point in their lives.

Today, only about one-fourth of millennials (28%) are debt-free. Of those, about 1 in 3 (34%) have never had debt, while 1 in 4 (25%) have paid off their debts within the past year.

Paying off debt may strengthen millennials’ commitment to financial freedom. Approximately 83% of debt-free millennials are confident they can stay out of debt.

Most millennials who don’t carry non-mortgage debt attribute their financial position to responsible spending habits. Nearly one-third of millennials (32%) say they’re debt-free because they don’t spend more than they make and because they pay their bills before they’re due.

Others say they are financially fortunate because they never had to borrow student loans (28%) or pay a large, unexpected expense (25%).

Two-Thirds of Millennials Have Credit Card Debt

Student loans may seem ubiquitous among millennials, but the leading cause of non-mortgage debt for this generation is actually credit card debt, with 67% carrying a balance.

Nearly 1 in 3 millennials (29%) don’t pay their credit card bill in full every month. Of those who have credit card debt, the average amount they owe is $5,349 — about 14% less than the average U.S. balance of $6,198.

However, about 1 in 4 millennials (23%) who don’t pay in full each month owe $10,000 or more in credit card debt.

Among millennials, credit card debt tends to increase with age. Geriatric millennials, who are farther along in their credit journey, carry an average credit card balance of $6,048 — about 20% more than younger millennials.

Millennials may have more debt than any other generation, but they distrust big banks and are actually wary of borrowing money.

Approximately 16% of millennials don’t own a credit card. Of those, more than 1 in 3 (34%) don’t have one because they fear going into credit card debt. Those who don’t have a credit card prefer to pay with a debit card (35%) or with cash (23%).

Although millennials will accept credit card debt in an emergency or to make a large necessary purchase, 1 in 5 (20%) regret not paying off their credit card bills.

Nearly 1 in 4 Millennials Don’t Know Their Credit Score

The average credit score rose to 714 across the U.S. in 2021, but millennials are still lagging behind. The average credit score among millennials is a “fair” 648. 

Although millennials are at the age when they need to check their credit for major expenses, such as a mortgage or an apartment lease, about one-fourth (22%) don’t even know their credit score.

The main reason millennials are unaware of their credit score is because they know it’s good (26%). Meanwhile, 24% don’t know their credit score because they think it’s poor, and 21% are too nervous to check it.

The Average Millennial Owes More Than $100,000 in Student Loan Debt

Nearly 15 million millennials carry student loan debt — more than any other generation. In fact, only 8% of survey respondents report never having student loans.

Nearly half of indebted millennials (48%) carry student loans, with the average millennial owing $126,993.

The microgeneration of geriatric millennials is 14% more likely to have student debt, but younger millennials are likely to have more. The average geriatric millennials carries about $111,000 in student loans, while nongeriatric millennials carry an average of $135,000.

A majority of millennials (54%) owe $10,000–$99,999 in student debt. But for students of advanced degree programs, such as law and medicine, the balance is much higher. About 1 in 8 millennials (12%) must repay $100,000–$199,999 in student loans.

Of course, with interest, millennials end up paying much more than the amount they initially borrowed. Yet 40% of millennials don’t know the interest rate on their student loans.

Nearly 1 in 4 Millennials Regret Borrowing Student Loans

Bogged down by student loans before they even earn a real paycheck, many millennials believe college isn’t worth the cost — especially for degrees that don’t pay off.

Nearly 1 in 4 millennials (24%) regret not choosing a career with higher earning potential. 

College students expect to earn $103,880 one year out of college, but full-time U.S. workers made about $54,000 a year in the first quarter of 2022.

Millennials make even less — 40% earn less than $50,000 annually, and almost 1 in 5 millennials (19%) receive less than $25,000 a year.

A quarter of millennials (22%) also regret borrowing student loans.

Millennials with student debt may find it more difficult to start families, buy homes, and save for retirement than those who are debt-free. Of those who do not currently have debt, more than 1 in 4 (28%) say it’s because they never borrowed student loans.

As they move into middle age, geriatric millennials continue to feel the ripple effects of their debt. They are 9% more likely to regret their student loans than younger millennials.

Half of Millennials Spend Nearly 50% of Their Monthly Income on Housing

With home prices rising 7x faster than income and rent rising 4x faster than income, millennials must spend significantly more of their earnings on housing than previous generations.

The average millennial spends 47% of gross monthly income on housing — roughly 1.5x more than the 30% experts recommend for financial health.

About two-thirds of millennials spend more than 30% of their income on housing, while half spend 50% or more. These are households the U.S. Department of Housing and Urban Development considers “cost burdened” and “severely cost burdened,” respectively.

For comparison, only 22% and 28% of households among all generations were considered cost burdened and severely cost burdened, respectively, in 2011.

One-Third of Millennial Renters Don’t Think They’ll Ever Afford a Home

More than half of millennials (53%) own a home, but 40% of homeowners don’t think they could afford one at today’s prices.

Since the first quarter of 2021, the median U.S. home price has jumped 16% to $428,700 as limited inventory drives fierce demand for housing.

Millennials who spend a significant portion of their monthly income on rent have little left over to save for a down payment on increasingly expensive homes. As interest rates rise, making borrowing more expensive, homeownership becomes even less attainable.

As a result, many millennials are priced out of the market or their debt prevents them from obtaining a mortgage. Nearly 1 in 3 millennials (30%) who don’t own a home think they’ll never be able to afford one.

Although homeownership is one of the best ways to build wealth, it comes with unexpected costs that can lead to buyer’s remorse. About 1 in 6 millennial homeowners (16%) regret their purchase.

1 in 4 Millennials Doubt They Could Pay a $500 Emergency Expense Out of Pocket

Millennials are often criticized for their money mishaps, but they’re actually decent savers. The average millennial has $49,463 in savings, and about 1 in 4 (26%) have $100,000 or more.

In general, financial experts recommend saving 1x annual income by age 30. Considering that full-time U.S. workers earn a median annual salary of $54,000, the average millennial is roughly on track.

However, more than half of millennials (56%) have saved less than $50,000, with 1 in 7 (14%) reporting $0 in savings.

Failing to save is the No. 1 financial regret among millennials (37%). Without enough money set aside for emergencies, millennials may sink further into debt by applying for a high-interest loan or charging expenses to a credit card.

As a result, one-fourth of millennials (25%) aren’t confident they could afford a $500 emergency expense out of pocket. Predictably, the percent of millennials who think they could pay for an emergency expense gets smaller as the cost grows.

One-third of millennials (33%) doubt they could afford a $1,000 emergency expense, and nearly half (48%) don’t think they could afford a $5,000 emergency expense out of pocket.

1 in 5 Millennials Say They Can’t Afford Kids

As inflation soars to its highest rate in 40 years, millennials struggle to pay for basic primary expenses. For example, more than 1 in 4 millennials (27%) say they can’t afford gasoline, which has risen to nearly $5 a gallon across the U.S.

Millennials also say they can’t afford:

• Their mortgage (29%)
• Medical care (27%)
• Bills (24%)
• Rent (20%)
• Food (19%)

The generation’s debt burden may also make it more difficult to afford discretionary expenses, such as a vacation (45%), that could improve their quality of life. It may also explain why millennials are slow to reach traditional markers of adulthood, such as starting a family. 

About 77% of millennials already have children or want them in the future, but 1 in 4 (25%) say they can’t afford them.

The sentiment is particularly strong among younger millennials, who have had less time to pay down their debts. They are 41% more likely than geriatric millennials to say children are too expensive. 

The average cost to raise a child through age 17 is more than $233,000, and almost 1 in 5 millennials (19%) have delayed having children until they’re more financially secure.

Even then, 1 in 9 millennials (11%) regret having kids, with younger millennials 37% more likely to have regrets than geriatric millennials.

Millennials’ Money-Saving Habits

Millennials aren’t spending all their money on avocado toast anymore. They’re working hard to build wealth. But with education, housing, and basic cost-of-living expenses far outpacing wage gains over the past few decades, they’re less secure financially than previous generations.

More than 1 in 4 millennials (26%) work multiple jobs to make ends meet.

To save money, just over half of millennials (54%) cook instead of eat out, and 45% buy generic instead of name-brand goods. Millennials also curb their spending by:

• Limiting or canceling subscription services (39%)
• Buying used goods (35%)
• Avoiding driving (25%)
• Renting instead of buying a house (24%)

Methodology

The proprietary data featured in this study comes from an online survey commissioned by Real Estate Witch. One thousand American millennials were surveyed on June 16, 2022. Each respondent answered up to 21 questions related to their finances, debt, and savings.

About Real Estate Witch

You shouldn’t need a crystal ball or magical powers to understand real estate. Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $70 million on realtor fees. Real Estate Witch’s research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.

More Research From Real Estate Witch

Millennial Home Buyer Report: 2022 Edition: Millennials still struggle to afford a down payment. Learn what risks they’ll take to afford a home in a competitive market.

U.S. Rent Prices Are Rising 4x Faster Than Income: It’s not just home prices. Rental rates are rising to record highs across the U.S. Find out where rent prices are outpacing income at the highest rate.

Two Years Into the Pandemic, Americans Are Still Struggling Financially: Americans have taken on additional debt to pay their bills since the start of the pandemic, and many fear they’ll never recover.

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