Crushing college debt in an era when many view higher education as a must has spurred millennials to become better savers.
The evidence? A recent study by Bankrate.com that found nearly two-thirds of millennials saved more than 5% of their earnings - a big increase over the previous year. WBFO hit the streets to ask millennials about their savings habits.
“My dad just recently retired and ended up getting less in his pension package than he thought he would. It was a problem because they said 'oh, that was money we were counting on,'” said Fred Brown. “The way of living in the United States you see is that everyone has debt. It’s normal to have debt. It’s encouraged to have debt, whether it’s a mortgage or a credit card. This is something that is seen as a good thing. I have a lot of school debt, so I try my hardest to have no other kind of debt, except for medical bills.”
According to The Federal Reserve Bank of New York, student loans have eclipsed both auto loans and credit cards, making student loan debt the largest form of consumer debt outside of mortgages.
Justin Castro told WBFO he’s learning from his parents.
“A lot of our parents are telling us 'hey, I made this mistake when I was younger,' ” said Castro. “Look at me now. I didn’t achieve everything that I wanted to because I blew through my money too quickly. I made a lot of stupid decisions. They try to make a better future for us. They are trying to show us a better way to save and what not.”
Castro said while his parents never finished college, they are helping him save for college in hopes that he’ll finish with minimal debt. Nearly half of students expect to pay at least $250 a month once they start paying back loans.
Millennial Nathaniel Richardson said budgeting is essential for his generation.
“It’s important actually to think ahead because if you don’t, you often get caught up in bills, late drafts, student loans if you went to college,” said Richardson. “Even with two jobs which I hold now, it comes equivalent to one full-time check. A lot of people within my generation have to work two jobs just in order to make rent and stuff. It’s not like it was back in the day where a man had one job, and he could support his entire family.”
A study by the nonprofit civic group New America shows that about two-thirds of students who are repaying debt develop a budget. More than a fifth explore loan forgiveness programs or seek to defer payments.