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Michael D. Hart, P.C.
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Generation Z already in debt

According to a survey of 2,000 people by banking and brokerage firm Charles Schwab, members of Generation Z, the generation after millennials, are already carrying debt. Young adults born between 1998 and 2002 have an average debt load of $4,343. Millennials born between 1993 and 1997 have $11,663 in average debt when credit card debt and student loans are included. Virginia residents who are in debt or considering taking on new debt should be aware of the different types of credit and debt.

Almost half of the young adults surveyed had less than $250 in savings. One in five called home mortgages bad debt and 27 percent labeled credit card and other revolving debt good debt. Nearly 40 percent of those surveyed thought student loans were bad debt. According to those who work in the financial fields, though, student loans and mortgages are good debt. These debts are usually low cost and come with tax advantages for the borrower. Credit card debt, meanwhile, is typically viewed as bad debt because of its much higher interest rates.

According to the president and chair of the Charles Schwab Foundation, who is also a financial advisor, students should not take out more to pay for school than they expect to make as a first year salary. She also recommends keeping total debt to less than 36 percent of gross income. She includes auto loans, credit card debt, mortgage debt and other debts in her definition of total debt.

People in Virginia who are struggling to pay down debts might want to speak with an attorney. An attorney with experience in bankruptcy law may suggest options to reduce or eliminate debts. For people who earn a regular wage, Chapter 13 bankruptcy might allow for the restructuring of debts so that payments are more manageable.

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Michael D. Hart, P.C.
19 Church Street Southwest
Roanoke, VA 24011

Phone: 540-627-6520
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