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Why Less Debt Among Young Adults Is Bad News

Monday, February 25, 2013 - 11:27 AM
From Fortune:
Adults under 35 have more student loan debt and less exposure to credit card, car, and home loans.  That's a troubling sign for the economy.

... Young adults, however, haven't taken on nearly as much debt as their parents. It's uncertain if the trend will continue as the economy improves, but for now, those under 35 years old have shed debt faster than older ones, according to a report by Pew Research Center released last week. The study doesn't say if this is a good or bad development, but many signs suggest the drop means Millenials are more anxious than responsible about their finances.

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It looks like the Millenials aren't feeling they have much job security and are postponing major purchases.  It certainly doesn't say much about their faith in the long-term outlook for the economy. 
3
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,954
1. Tuesday, February 26, 2013 - 11:06 AM
Maybe that's because most of "the Millennials" don't have job security. Young people today are having a far tougher time finding full-time jobs that are not just short-term contract positions. In deciding to postpone major purchases, their feelings about "the long-term outlook for the economy" probably do not play as large a role as their commendably prudent desire to avoid getting into debt.
4
ClickClackClickClack18 posts since
Feb 7, 2012
Rep Points: 149
2. Tuesday, February 26, 2013 - 11:50 AM
I don't see a lot of job security in any group. 

As for taking on debt, I've never been a member of the "debt is bad" party.  There is no one-size-fits-all-answer, but  taking on debt is sometimes inevitable (a desire to acquire the latest gadget or to keep up with the proverbial Joneses is not an "inevitable" situation) and if done for prudent reasons is not necessarily bad IMO.  I also commend those who can minimize it, avoid it altogether, and/or shed it quickly.  
3
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,954
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