In the fourth chapter of the State of Young America, we find that the increased cost of living has made it more difficult to make ends meet for young people. Rising unemployment, rental and gas prices, and mounting debt are just a few of the problems young people are facing today. The result is more young people are forced to use a significant proportion of their income just to pay off the debt they accrued trying to pay for these expenses. As a result, almost 70% of young people have found it harder to make ends meet in the past four years (since the housing bubble burst and the Great Recession began).
It should be unsurprising, then, that many young people are moving back in with their parents, and when they aren’t, they tend to rent rather than buy (86% of them are renters). Here is just a snapshot of the stats taken from our report and poll:
- 41.3% of young Americans aged 25 to 34 were spending more than 30% of their income on rent alone.
- 63% of survey respondents ages 18 – 24 year reported living at home at some point in the past year; 21% of 25 to 34 year-olds did the same.
- More than half (52 percent) of young people describe their personal financial situation as just fair (36%) or poor (15%).
The increased cost of living has forced many young people into debt just to stay afloat. As more and more of their income goes to debt payments and everyday expenses, saving for the future becomes a distant dream.
- Over one half (53%) of young households have credit cards, an increase of 24.2% since 1980. 72% of these households have some amount of credit card debt.
- Four in ten (39 percent) say their personal debt has increased in the last four years, including 43 percent of young people between ages 25 and 34, and 31 percent of those under 25.
Despite all this, there is still some hope for the future. Aggregate credit card debt is lower than at its all-time high in 2008 – 2009, and some recent legislative changes hold promise. In the meantime, tough decisions remain.