Deconstructing the millennial debt stress

Click to enlarge

Wells Fargo Millennial Retirement Survey 2013

It’s hard to feel financially free when carrying a heavy backpack of student loans. Wells Fargo’s Millennial Retirement Survey found that 54% of this generation claimed that debt was their biggest financial concern. But what’s interesting is to see the difference in attitude around financial setbacks and goals between the determined Boomers and the optimistic Millennials. Both generations are weighed down by debts (student or otherwise), but only 22% of Boomers feel overwhelmed by it compared to 42% of Millennials.

The difference in attitude may not have so much to do with the amount of debt, but rather past experiences and the current life stage they’re in at the moment. Boomers have been actively playing in the job world for a lot longer; most likely they’ve figured out a budget that works for them, have a retirement plan in place and have acquired assets that give them a sense of financial security. They view loans as a nagging question of when they will finally be free from their debts.

However, young Millennials are standing in one of the most financially unstable times of their lives. Not long ago they crossed the graduation stage starry-eyed, bursting with excitement for their futures, only to walk face first into the reality of an economic downturn and a mounting pile of debt. Unlike the built in support they could rely on on campus, the real world doesn’t offer a set foundation to build their dreams on. Constructing their future must start with breaking ground on where they stand now, which means digging up their loans and making a payment plan that works for them. Their debt stress doesn’t come from the question of when they will pay it off, but rather how they even start paying it off.

Here are a few steps Millennials can take today to break ground on their mental money mania.

  • Get the details. Call your lender and speak to a representative about how much you owe and what the interest rate is per year. Although you may be scared to hear the jaw-dropping number, living in the dark never gets you anywhere. And heck, who knows the number could actually be lower than you think. But either way you can’t make progress unless you turn on the light and see what you’re standing in.
  • Do the math. Sit down with a calculator and figure out how much you can comfortably repay on your loan each month after expenses have been taken care of. I suggest that while you have the representative on the phone, ask them to suggest a repayment plan that’s suited to your situation.
  • Stop pointing your finger. Stop playing victim and blaming the economy, the school’s over-priced tuition or Mom and Dad for not footing your tuition bills. It’s time to start writing the story where you’re the hero.
Chelsea Castner

About Chelsea Castner

Chelsea Castner knows how important our 20’s are for laying a foundation of values and guiding principles for life. That decade’s pivotal decisions can make us or break us. Maybe it was growing up on a farm in New Jersey with three brothers, but facing and talking about the “tough stuff” is in her blood. That attitude allowed her to tackle financial challenges of being single, sharing an NYC apartment with two roommates, balancing a social life, all while taking her career up a notch and planning for future goals. As a Brand Strategist at New York-based marketing company Just Ask a Woman, Chelsea’s interviews with hundreds of women across the country (in person and even on their cell phones while at the checkout counter) have made her a go-to source when it comes to understanding women. Due to her strong curiosity to always know why she created Just Ask Y, a think tank to help Generation Y women grow to their full potential by examining new trends, forward thinking ideas and personal subjects. She looks forward to posting candid, proactive and practical advice that will help millennial women start building long term relationship with their finances.
This entry was posted in Budgeting & organization, Financial info, Retirement planning and tagged , , , , , , . Bookmark the permalink.
Beyond Today Blog

Leave a comment

Your email address will not be published.

Your questions and comments really matter to us! We're glad you want to join the conversation and connect with other readers. All we ask is that you keep some simple guidelines in mind:

  • Stay on-topic. Only comments that are related to the subject of the blog entry will be posted.
  • Be respectful. It's okay if you disagree with a post or comment, but please, no personal attacks or offensive language.
  • Maintain your privacy and confidentiality.Please do not provide any of your specific account details or other personal information! If you have immediate service needs, please contact your bank representative or Customer Service.
  • Wells Fargo team members: In the interest of full disclosure, if you are a current employee of or are associated with Wells Fargo, please make note of your affiliation.