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Amy Nickson On 1st Jun,17
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Living with debt has become a part of our lives, where millennials are no exceptions. As per some recent stats, millennials are comfortable in discussing debts than their seniors.

Student loan and credit card debts have been major issues for almost every millennial. But, how comfortable they are in discussing debts depends on how fast millennials can get rid of their dues. Because when we are free to talk about money and debt, we can handle them better.

How free millennials are to talk about their debt

According to a recent survey, younger millennials between 18 to 24 years of age are most comfortable (18.7%) discussing their personal debt. Whereas seniors of ages 65 and above are least comfortable (6.6%).

Another reason why millennials might be comfortable discussing their debt is due to the nature of their debt. Most millennials are down with their student loan debt which is not new. So, there’s nothing to feel ashamed of.

Now that you know that millennials are free to discuss debt, check out some interesting facts about them:

  • At least 81% of Gen Yers have at least 1 long-term debt, and almost half of them are trying hard to pay off maximum dues.
  • Less than half of the Gen Y population don’t have 3 months of living expenses saved for emergencies.
  • Almost 40% millennials still depend on their parents for monetary help.

A disappointing job market might be the reason that millennials are unable to come out of debt. Whatever is the reason, Gen Yers shouldn’t stop trying.

Smart strategies for millennials to become debt free

Here’s a list of few smart strategies that millennials could follow to reduce their debt burden:

1. Take advantage of income- driven repayment plan

The more time it takes to repay debts, lesser will be your chances to save for your future. Student loan debt is an alarming issue for the millennials, which they’re working hard to pay off. In this situation, income-driven repayment plans such as Income-Based Repayment, Pay As You Earn and Income-Contingent Repayment are lifesavers. These programs help free up cash flow and gives you the opportunity to concentrate on other financial matters.

2. Refinance or consolidate your loans

Millennials should try to reduce the interest on their loans so that it gets paid off without much efforts. For that, they can refinance or consolidate their loans to lower the interest rate.

According to financial experts, we must go for a fixed rate of interest and shop around for best rates when taking out a loan. Because interest rates are bound to increase the next year or so and when they do, payments will automatically rise.

3. Ask for higher pay

Negotiate a pay hike with your employer and put that extra amount toward paying down your debts.

Though most millennials don’t negotiate their salary in the fear of losing their job, one should ask for a raise as repaying the debt is the sole responsibility of the borrower.

Few financial advice for the young generation

Since financial difficulties make life more complex, we must try to solve them fast so that they don’t take a toll on us. Millennials are no exceptions here. In fact, they should be more serious about their finances as they’re the future of our nation.

Here are few monetary advice for the millennials to combat financial difficulties:

1. Save for emergencies ASAP

As per financial experts, one should stack up at least 3 months of living expenses for rainy days. By doing so, life will be less stressful during tough times.

Set up automatic monthly withdrawals to your emergency savings account.

2. Stick to your budget

Your job is not over after creating a budget. A positive result will reflect only when you’ll stick to your budget.

You must also revisit and modify your budget from time-to-time according to your income and present financial situation.

This way, it’ll be easier for you to tackle fiscal problems.

3. Save for retirement

Being in debt doesn’t mean that you’ll stop saving for retirement. Both saving for gray hair days and paying off debts are important.

Try to contribute at least 10% of your income toward your retirement fund.

The early you start saving for retirement, the bigger will be your nest egg.

4. Attack your debt

The best way to get out of debt is to attack your debts. Leaving the debts as it is would make your economic situation even worse. So, make a plan, take help of financial experts when required and find out smart ways to become debt free.

If you are a millennial, then are you comfortable in discussing your debts? Share your thoughts with us.

Last Updated on: Thu, 1 Jun 2017

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