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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
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
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
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.
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.
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.
The early you start saving for retirement, the bigger will be your nest egg.
4. Attack your debt
If you are a millennial, then are you comfortable in discussing your debts? Share your thoughts with us.