NORFOLK, Va. — Talking about money can be uncomfortable but ignoring it, or not understanding your current situation, may only make things worse.
LendingTree, an online loan marketplace, looked at more than 150,000 anonymous credit reports to see how financial obligations impact each generation.
Matt Schulz, Chief Credit Analyst, says the company found that “Gen Xers have the highest average debt of any generation, and their non-mortgage debt is growing.”
He says, people between the ages of 43 to 58 tend to have more financial responsibilities.
“They are having kids starting to go into college, they're maybe spending to help their aging parents and they have auto debt and personal loan debt -- so it's a really expensive time in life,” he says.
In addition to analyzing the 150,000 credit reports during the first quarter of 2023, they looked at 87,000 credit reports in March 2021, and found that Gen Xers also have the highest auto debt, followed by credit card balance, and personal loans.
“Some of this comes down to access to credit because you can't run up big debts unless you have access to a lot of credit,” he says.
Baby Boomers and Gen Xers have been in the game longer, allowing them to have higher incomes and better credit scores. Schulz says when you have more credit you can buy more things, but you are also left with more debt.
“Whereas Gen Z, and certainly younger millennials, are still getting their feet under them credit-wise and just may not have as much access to credit as others do,” he says. “If they do have that access, it may come with terms that are prohibitive enough to them that [they’ll wait].”
Research suggests that they are waiting to buy homes and vehicles and instead rack up credit card charges.
If you have debt, Schulz says:
- Consolidate
- Ask for a lower rate
- Revisit your budget.
“That may mean carving out a little bit more money in your budget to save for that down payment or to assume that you're going to have to spend more for that car or for that mortgage,” he says.
Keep in mind this may not be true for every person, but it helps to know what the research shows so you can change your budget accordingly.
LendingTree also reports that personal loans, student loans, auto loans, credit cards and mortgages are the five major debts type.
