The scariest financial statistics facing millennials, and what to do about them

Scary Jack-o-lantern and scary finances

Halloween is the time of year when Americans spend good money to get a bad case of the willies. Case in point: the newest "Halloween" sequel, which just scared up $76 million in its opening weekend, and is on track to become the highest-grossing slasher movie of all time.

But for adults who are younger than that 40-year-old film franchise, there's something even more bone-chilling than watching a masked septuagenarian slice and dice his way through a fictional Illinois town: the state of their personal finances.

There are some truly terrifying financial statistics about millennials out there, and while they may make you want to cover your eyes, having the courage to confront them can be instructive--and maybe even life-saving! Continue on, dear reader, if you dare…

Nearly half of all student loan borrowers worry they won't be able to pay off debt

If you really want to scare some young adults gathered around a campfire, hold a flashlight under your chin and start rattling off student loan statistics. In addition to the 2016 study which showed that 48 percent of student loan account holders expressed concern about their ability to pay off their debt, there are also current projections that nearly 40 percent of borrowers are expected to default by 2023, per CNBC.

Student loan debt is the fastest-growing sector of consumer debt, and that expansion has occurred during the same period of time that most Millennials have been pursuing higher education. From 2003 to 2016, total student loan debt in the United States has more than quadrupled, rising from $240 billion to $1.3 trillion. Today there are 45 million student loan borrowers, representing 60 percent of all college grads, and the average student loan debt for Class of 2017 graduates was $39,400 per person.

It's an ever-expanding burden that's already been too much for many to bear. Over a quarter of students who left college in 2010 and 2011 have since defaulted on their loans. 

And yet for older millennials, student loans aren't even the biggest source of debt. For those between the ages of 25 and 34, that dubious distinction belongs to credit card debt.

Millennials fear credit card debt more than dying

Typically, the younger you are, the more susceptible you are to scares, to the point that anything harder-edged than "It's the Great Pumpkin, Charlie Brown" can traumatize a child. If you're one of the boils and ghouls who grew up being scarred for life by "Tales from the Crypt" or "Are You Afraid of the Dark," then you were probably also at just the right age to be deeply affected by the 2008 financial crisis and its grim fallout.

That lingering fright is one of the major reasons why a recent study found that 33 percent of surveyed millennials named credit card debt as their greatest fear--more than the 16 percent who cited the threat of war as their top pick, or even the 20 percent who chose death as their number one.

The survey of 18- to 34-year-old adults with credit card debt also found that the average amount of debt held by the respondents was a whopping $5,290, which explains why roughly 33 percent of them said accruing interest was the scariest aspect of their debt.

Black and white photo of credit cards. Millennials fear credit card debt more than death or the threat of war.

Two-thirds of millennials have nothing saved for retirement

The overwhelming fear of debt seems to have kept many millennials from saving for their future, which has led to another shocking stat: 66 percent of adults between the ages of 21 and 32 have nothing saved for retirement, according to CNNMoney. 

Of course, it's not as if they're just choosing to live extravagantly. A study on the Class of 2015 concluded that those graduates wouldn't be able to retire until the ripe old age of 75, and cited high student debt and rising rent as contributing factors.

Once again, the 2008 crash is also largely to blame, as lingering distrust of the stock market has made millennials wary of investing. Forbes contributor Kate Ashford says that when Millennials do save, they're more likely to keep that money in cash or a savings account, versus investing it in the stock market. As a result, they're not getting the growth enjoyed by those with a proper retirement account.

If your employer offers a 401(k) plan, you should be taking advantage of any matching contributions available to you. And if your job doesn't come with a retirement plan, you should see if you can set up a traditional or Roth IRA on your own.

If you can't save for the future because you're still paying for the past, look into refinancing your student loans for a lower interest rate. If credit cards are the problem, ask your lender for lower interest rates, and start paying down your debts, beginning with the card with the highest interest rates.

Create a budget to figure out how you can manage everything, and make some hard choices about what you can and can't afford. Many Millennials are at a point in their life where they want to buy a home and settle down, but prioritizing mortgages and other immediate expenses can keep you from escaping debt and building the nest egg you'll want to have in your golden years.

When you're young, it's tough to pay down debts and save for the future--especially if you're still underemployed at this relatively early stage of your career. But at least you still have time to start implementing the tactics that will help improve your financial future. This Halloween, you should heed the warning of these shocking statistics and change your ways… before it's too late! For more vital information on wealth management, contact Landmark Bank.

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