Generation Y Is More Concerned About Managing Debt Than Saving For Retirement

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Fidelity Investments recently conducted a study on how those from Generation X and Generation Y view and make decisions about money.

One of the most interesting findings was that almost 8 out of 10 respondents, when asked what keeps them up at night, indicated that money was their largest concern. Also, managing debt has become a more important goal than saving for retirement.

It’s clear from the press release that dealing with debt issues has become the primary obstacle in reaching other financial goals and it is only getting worse.

Those from Generation Y, born between 1976 - 1987, are entering early adulthood with more debt than ever before. They often enter the workforce straddled with credit card debt and student loans accumulated while in college. Goals related to saving for retirement, the down payment on a first home, or even for a wedding, are starting to take a back seat to controlling debt.

If managing your debt is keeping you from meeting your other financial goals, it is time for you to take control of your debt. Prior to exploring options related to debt settlement or debt consolidation, it’s important to get a gauge on where you are now.

Step One

You need to determine how much debt you actually have and the terms of repayment. Pull your statements together or contact your creditors and make a list of all your accounts, the balances, the minimum payments, and the interest rates associated with those accounts.

Step Two

You need to take a close look at your spending. It is important to determine how much you have every month that can be applied towards paying down your debt. If you are living beyond your means or have very little that can be used to retire your debt, you will need to curtail your spending. Look at where your money goes every month and begin to cut out the things you can live without.

Step Three

Put your plan down on paper. List which debts you are going to pay first, how frequently, and in what amounts. Many experts advise consumers should start paying down the accounts with the highest interest rates first to help minimize the amount of interest that is paid. Others suggest starting with the smallest balance so you are able to quickly payoff a debt and gain the confidence associated with doing so. Regardless of which strategy you employ, paying down any of your debts is better than doing nothing.

Step Four

Implement your plan and stay determined. Life is unpredictable and you will likely hit a few speed bumps along the way, however, it is important to stay on course.

If the minimum payment on the debt you’ve accumulated exceeds your income minus life’s necessities, you should begin to explore options related to debt consolidation and debt settlement to help lessen the burden and help you move forward.

Once you’ve been able to effectively get your debt under control or eliminated, you can begin to focus on more important goals like saving for retirement.

Source:
Fidelity Investments

About the Author:
Chris Rocks is the Founder and Executive Director of the Credit Advisory Alliance (CAA), a membership based organization helping those who have suffered a financial crisis restore their credit and reinsert themselves back into the credit-driven economy. Prior to founding CAA, Chris had successfully helped consumers achieve their financial goals as both a Financial Advisor and the Vice President of a Mortgage Origination Firm.

Post written by Chris Rocks

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