Born sometime in the 1980s? Feel like no matter how hard you try, the debt monkey is never getting off your back? Constantly feeling like your checking account has, oh … about 34% less money in it than you expected?
It’s not your imagination. People from every generation are struggling with debt these days. But there’s research to suggest that those born in the 1980s have it particularly hard.
According to a recent study from the Federal Reserve Bank of St. Louis, the net worth of families headed up by people born in the 80s was 34% less than predicted.
The other worrying thing the study found was that between 2010 and 2016, the average family with an 80s-born head-of-household lost more financial ground than other demographics—despite the fact that the 2008 recession had ended.
Clearly something is going wrong here. And what it may come down to is timing. Here are a few of the top reasons why some Millennials have it worse when it comes to debt.
You're less likely to own a house
The study showed that people born in the 1960s and 1970s were hit hard by the recession, too—but since 2010, they’ve recovered significantly. And that’s not all due to income.
One issue seems to be homeownership. We’ve written quite a bit about how homeownership isn’t all it’s cracked up to be—but in this case, it’s the timing that makes the difference.
People born in the 1960s and 1970s are more likely to have bought their homes before the 2008 financial crisis—before home prices became grossly inflated and then tanked. As the housing market has recovered, they’ve had time to recoup their property value.
1980s kids haven’t been able to benefit from a recovering housing market as older generations have. Those born in the 1980s were in their late teens and twenties when the housing bubble hit.
By 2016, only about 45% of 1980s kids owned a home, significantly below expected levels.
You’re in too much debt
The more debt you have, the more precarious your financial position. And student loans are especially burdensome for Millennials.
About 63% of us carry $10,000 or more in student debt; over a third carry $30,000 or more. And it takes a long time to pay off that debt. Studies show that the average person with a Bachelor’s degree takes about 21 years to pay off their student debt.
That’s a long time to put your life on hold. Having debt at that level means putting off buying a home, getting married, having kids, and other major life milestones. And those are the trade-offs people born in the 1980s are more likely to face.
You’re not making as much as your predecessors
Despite the fact that Millennials are the largest generation currently active in the workforce, our salaries are disproportionately low.
In most parts of the country, Millennials make less than the national average—a lot less. And according to a recent analysis of Federal Reserve data by Young Invincibles, Millennials today earn about 20% less than Baby Boomers did at the same age.
According to Pew Research, about 29% of men and 36% of women from this generation hold a Bachelor’s degree or higher—compared with 24% and 28% of Gen X men and women (respectively), 22% and 24% of Boomer men and women, and 15% and 9% of Silent Generation men and women.
See also: Lower Student Loan Payments
You went to college during a tuition boom
We’re the most-educated generation in history—we went to college in droves, and we paid the price. This may be part of why those of us born in the 1980s struggle so hard with debt—more of us went to college at a time when tuition prices started to skyrocket.
According to the College Board, average college tuition has risen a whopping 213% from 1988 to 2018—so everyone in the generation born in the 1980s got hit with steadily increasing prices.
So if you were born in the 1980s and you’re struggling with debt, it’s not just you. Our generation faces particular economic conditions that both drive up debt and make it more difficult to pay off.
One way out of is to fast-track paying off your student loans. See how much you could save by refinancing.