Financial debt by generation

Curious about the breakdown of financial debt by generation? You’ve probably heard how younger generations have extraordinarily high amounts of debts, especially when it comes to student loans. And while that’s certainly true, you might be surprised to know they aren’t the generation with the most debt. 

So how do the generations differ when it comes to non-mortgage debt in the U.S.? And how does debt correlate with a generation’s likelihood of investing in crypto? 

Let’s take a look!

2021 financial debt by generation data from LendingTree.

Boomer (57 – 75)

Average amount of non-mortgage debt: $28,672

Debt growth from previous years: Overall, boomer debt is growing. During the pandemic, boomers ended up taking on more debt. According to AARP, boomers had $132,039 in debt in 2019, which increased to $140,887 in 2021. However, some predict that this debt will reach a peak and then start declining as boomers start getting older and selling off their assets to pay off their debts.

Gen X (41 – 56)

Average amount of non-mortgage debt: $37,524

Debt growth from previous years: While Gen X earns the most money compared to other generations, it also has the most debt. In 2016, Gen X had an average debt (including mortgages) of  $124,972. By 2019, this debt had increased by 10%. In 2021, their average debt was up to $136,869, and experts estimate it is likely to keep growing.

Millennials (25 – 40)

Average amount of non-mortgage debt: $24,929

Debt growth from previous years: In the past few years, millennials had the second-highest rate of debt growth behind Gen Z. In 2019, millennials had an average debt of $78,396. A year later, that number was up 11.5% to $87,448. The bulk of that debt is student loans, and the debt will likely continue to grow.

Gen Z (18 – 24)

Average amount of non-mortgage debt: $9,176

Debt growth from previous years: Gen Z had the highest rate of debt growth over the past few years. According to Experian, they had $9,593 in debt in 2019 and ended 2020 with $16,043, a change of 67%. This growth was seen primarily in mortgage and personal loans. According to Business Insider, it could result from more of the younger end of the generation growing up, beginning their careers, and having more spending power.

How financial debt by generation is evolving and how crypto can help

The consumer debt crisis has been growing steadily over the years. It remains a serious problem, particularly for younger generations that are accumulating debt but don’t have enough assets to pay it off yet. 

In mid-2021, consumer debt, including mortgages, was $14.6 trillion, up from $14.56 trillion at the end of 2020. Since 2008, consumer debt has grown by $1.9 trillion.

Consumer debt is only likely to keep rising and could be one of the reasons why younger generations are turning to crypto. 

Crypto can provide people with financial services that they otherwise wouldn’t be able to access. For example, if they can’t get a loan because they have too much debt or a bad credit score. As crypto continues to gain popularity, it can be used to pay off debt, either directly or converted to fiat currency.