In a recent survey Millennials say their biggest debt issue is student loans. When asked to estimate certain categories of debt as a percentage of monthly pay, millennials report their debt breaks down, on average, as follows: credit card debt: 16%; mortgage debt: 15%; student loan debt: 12%; auto debt: 9%; and medical debt: 5%. Among all Millennials, 47% are allocating 50% or more of their paychecks to these types of debt.
The findings come from the latest Wells Fargo annual survey of Millennials.
The survey also found that 80% of Millennials want to save but only half of them do with the majority saying they are not doing so because they “do not have enough money to save right now.” Of those Millennials who have started saving, almost half are saving between 1% and 5% of their income for retirement; 31% are saving 6% to 10%; 18% are saving more than 10%. The percentage of income saved by men and women greatly varies, with half of women saving between 1% to 5% versus 39% of men.
Additionally, Millennials feel confident in many aspects of their personal lives, with seven in ten saying they feel better off financially than others in their own generation. In addition, 68% of Millennials expect their standard of living before retirement to be better than their parents.
Finally, 84% of Millennials feel they have the skills to succeed in their career goals when they are 40. More than three quarters believe that if they lost their job they could find a comparable one within a year.
BOTTOM LINE: “Save to Survive” or “Debt to Die”