Today’s 20-somethings are carrying 30 percent less debt than they did just a few years ago.
Among college-educated young people ages 20 to 29, the average reported debt last year was $31,800, down from more than $45,000 in 2011, according to a new PNC Financial Independence Survey.
“Financial maturity in this generation has noticeably shifted,” PNC Wealth Management financial adviser Cary Guffey said in a statement. “Younger millennials just entered adulthood when the economy shifted downward, and as a result, it’s clear they’ve become more cautious by avoiding debt.”
Related: How Millennials Are Saving the Economy
Even as they avoid debt, young people still aren’t saving enough to meet their goals, however: the number of young people who say they’re saving money dropped 6 percent since the 2011 survey.
Among the 20-somethings surveyed, 74 percent said they expected to own a home before age 35, while 66 percent said they planned to retire before or in their mid-sixties. Sixty-two percent have considered starting a business.
Despite those goals, just 11 percent are saving for a home purchase, 4 percent for starting a business, 9 percent for starting a family, and 6 percent for retirement. The top savings category is emergency funds.
Part of the reason may be that today’s young adults simply don’t have the money to both avoid debt and save for their financial goals. Millennials are more likely than previous generations to move back home with their parents due to financial hardship after starting their careers, according to a recent report from Millennial Branding and PayScale.
Among the reasons for their failure to launch: Low-paying jobs or part-time jobs with no benefits like 401(k) plans; high rents as housing prices climb because of low-cost mortgages; and a demographic oversupply of millennials, skewing supply and demand in the job market.
Top Reads from The Fiscal Times:
- 2014: The Year to Finally Keep Financial Resolutions
- Avoid These 10 Common Tax Mistakes
- The Consumer’s Guide to Breaking Up with Your Bank
