Much has been written about the Millennial generation, those who are roughly between the ages of 18 to 35. As the largest generation in population since the Baby Boomers, the younger sect is coming of age and influencing the American workforce and economy in new ways.
Living below the poverty line
One recent study explores "head of household" status among the age group, using that measurement to explore the differences between generations. One striking note in the study is that poverty rates are higher for the Millennial generation. Roughly 5.3 million of U.S. households living at the poverty rate were Millennials, out of 17 million households in that range total. In other words, about 31 percent of those in poverty are Millennials, compared to about 25 percent being Generation X and just over 29 percent being Baby Boomers.
Living below the defined poverty line leads to greater economic hardship. Fewer and small savings accounts are available for emergencies like medical care, and borrowing and debt increase to meet daily needs. Millennials also rent at a higher rate than other generations, which means they have less property to use as collateral when borrowing.
The ongoing student loan crisis is well documented, and it's common for many to carry significant credit card debt, medical bills and have other expenses like car loans that chew up income. For many, paying these bills is a challenge and a medical bill may be paid using a credit card instead of out of pocket, meaning the interest continues to grow. It can feel like a never-ending cycle: a trap that the borrower can't escape.
The debt cycle
For those who can't reduce monthly payments on interest and other growing charges, creditors may begin to call seeking payment and it's difficult to prioritize and control the bills as they mount. Bankruptcy is a form of protection for consumers. Some fear the social stigma of declaring bankruptcy, but the intention of the process is to help consumers get back on their feet, not to skip out on payments.
There are several options available, many of which restructure payments to make debt less of a burden, sometimes forgiving partial or entire sums in the process. It proves a solution to a growing problem so debt and interest costs don't hurt an individual's ability to meet daily needs.
Shedding light on a problem
While the data about poverty among the Millennial generation is noteworthy, there are always additional factors behind any study. Many Millennials move out of their family homes at a later age, for example. The study also notes that this age group is more diverse in racial and ethnic background. Statistically speaking, minority populations have higher rates of poverty as well, which would influence these figures. Additionally, younger people are still gaining career traction as compared to those in their forties and fifties, who have typically reached their earning potential.
The study sheds light on problems facing many Americans. Just as the data reflects trends but does not explain individual circumstances, each household has unique challenges. If debt is encroaching on quality of life and the ability to keep up, bankruptcy or another form of debt relief may offer a solution.