Dealing with Debt as a Millenial


As a young person, just out of school and getting into my first job, dealing with debt is part of my everyday life. I had student loans, and a car loan totalling around $38,000 when I graduated from University. These days, starting out life with this much debt is just the cost of doing business. It’s a necessary prerequisite to any kind of middle class education and (hopefully) existence.

Staying in debt, however, is not a necessary part of middle class existence. In fact, for a millennial  staying in debt, or taking the longest possible amount of time to pay off debt, is downright stupid. For me, I want to pay off my debt as soon as possible. I’ve gone a little extreme in the process of trying to pay off my debt quickly. I’ve become a permanent house sitter to save on rent costs, my fiance and I share a single car in an area with no public transportation, and are trying to be as frugal as possible about our upcoming nuptials. I’ve gone to these extremes because I worry that my debt is keeping me away from stable financial footing.

Job Security Is Rare

As a young person just entering the job market, I’m at the bottom of the barrel, employment wise. I was very lucky to secure full time employment immediately after graduation in my field of choice, but that doesn’t mean my job is secure. The economy isn’t what it used to be, times are tough, and if the axe ever came down, another job might not be right around the corner.

Once upon a time, you got a job, and stayed with that employer for your entire life. You might switch companies a few times, but for the most part, job hopping wasn’t really on the table.

Now, I would be shocked if I didn’t experience some form of unemployment in the future. I’m not a doctor, or a lawyer, and neither is my fiance, our job security is far from concrete. I’m trying to avoid unemployment as much as possible, but if that ever happens, I don’t want to have to worry about making payments on almost $40k in debt. Instead, I want to have no debt, and a financial cushion to fall back on. So, I have to pay it off.

Affordable Homes are Rare

Beyond having a financial cushion, I want a home. Buying property these days, especially for some people with a load of debt, is an entirely different ball game than it used to be. Interest rates are low, but home prices are high. I want to buy a decent house, but I don’t want to have to struggle to make ends meet if interest rates go up. To do this, I have to do two things:

  • Reduce my other financial obligations: I need to eliminate my $500 in minimum debt payments I make every month.
  • Save a monstrous down payment in order to keep my monthly payment reasonable.

Not everyone gets rid of all debt before home ownership, but I’m going to. Having all of this debt and having a mortgage would be way too much debt to carry should anything go wrong in life. I don’t want to have to chose between making a payment on my home, and making a payment on my education. So I’m going to pay it all off, and rent in the mean time.

Sufficient Retirement Funding is Rare

Saving for retirement isn’t something that’s on most people’s radar, especially people my age. After all, I’m 23. I’ve got my whole life to save for retirement. Unfortunately, I’m not expecting any kind of additional retirement funding, beyond what I provide for myself. I’m not saving for retirement yet, but once I’m out of debt (probably by the time I’m 24) I’ll start socking away cash into retirement funds.

Retiring with full pensions as some people have, is a thing of the past and an amazing pipe dream for most, including myself. Because of this, I’m planning on using time to my advantage by investing early. In order to do that, but have enough cash left over to you know, live, I’m going to pay all of my debt off.

Debt is the Enemy of Millennial Prosperity

Becoming an adult as a millennial has been a rude awakening for me. I don’t know what I expected, but I didn’t expect adult life to be as much of an uphill battle as it has been. Instead of beginning my life, having a wedding, saving for a house, or (now this is a long way off) thinking about having kids, I have to accomplish a laundry list of prerequisites in order to ensure my own security and prosperity. First I need to dig myself out of a $38,000 hole, build a big barricade around myself to protect from potential catastrophes, accumulate a small fortune in order to become a home owner, and then divert significant portions of my future earnings towards funding my old age.

Once that’s all accomplished, maybe I can get down to living a typical life. Until then, I’m suspended in 20-something purgatory, not quite sure of my place, but knowing where I’d like to end up. I do know one thing though, I’m not going to be able to accomplish any of that with the weight of debt hanging around my neck.

Is finding stable financial footing to be more difficult than you thought? I want to know!

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  • FrugalPortland

    I’m in the very same boat. I’m getting out from under it as soon as possible! Then, onto the next goal.

    • Jordann

      Me too, seems like my life is a series of goals to accomplish right now.

  • Emily @ evolvingPF

    I wouldn’t bother comparing the life of a Millennial to that of a Gen Xer or Baby Boomer or whatever at the same age. In some ways we have it way better and in some ways it’s harder. If you must compare, stick to your contemporaries. Just keep doing what you’re doing – take your goals a step at a time to make the life you want.

    • Jordann

      I totally agree, there are some ways that we (especially women) have it much better than the older generations. But there are, undeniably, some major differences, which I was trying to highlight.

  • Do or Debt

    I feel ya on this one! It’s been so hard to find permanent work, my retirement is practically non-existent and I have massive debt. I was lucky and found a good job after graduation….but then I decided to leave it for graduate school because I thought there would be “better opportunities”. Well, that hasn’t happened yet, but I am trying to stay positive. It is tough sometimes, when you feel like you have worked so hard and for what? It feels like the system is flawed and almost expects you to fail.

    • Jordann

      I agree, the opportunities that were supposed to be “out there” after school are much more limited than I expected.

  • Kretek

    I think people have this misconception that you can just monkey bar into the next job if you lose it. “Don’t worry, there’s plenty of jobs!” Yea, plenty of jobs you don’t want to take. If I lost my job as a writer, why would I want to go work for a roof and flooring company for 14 hours a day? I have $1,000 in a savings account, but realistically if I was out of a job for more than a month, I’d drown. I was out of a job for 3 months last time and I seriously applied to every job and not even a single call back. I didn’t even get anything from sending resumes besides “Sorry, you aren’t qualified.” I even tried temp jobs. You know you need 2 years of office work experience where I live? Not even remotely feasible. The job market IS NOT recovering. It’s so stagnant it hurts. If you get hired after being fired the first time, you live in fear every single day at the new job. And I do. I’m scared. I won’t lie.

    • Jordann

      I can’t imagine going through that. I’m extremely grateful for my job and I’m pretty sure that if I lost it for some reason, I’d have to move to a more populated area to find another one. I definitely don’t want to do that!

  • Mackenzie Randompath

    I think we’re all dealing with this no matter what age we are, unfortunately. We’re trying to pay off all our consumer debt, and build up our savings. We eventually want to purchase a home in a few years and don’t want anything hanging over our heads. Great post Jordann :)

    • Jordann

      Thanks! I agree, I think everyone is experiencing this in some way, especially with consumer debt. I don’t have any consumer debt (well except my car, which I bought used and I needed) so I’m a little frustrated because I had no choice but to acquire this debt, and now I have no choice but to tread water while I pay it off.

  • Budget & the Beach

    Mackenzie is dead on. I’m 42 and life isn’t stable for me either. What’s good, I mean great about your situation is you are not resting on your laurels, if you are out of debt by 24 and start saving for retirement then, AND you have the good sense to never think you are invincible, then you are in GREAT shape!

    • Jordann

      Thanks! I do think I’ve got the right mindset, I just want to be moving on to the next part of my life already! Enough of this debt repayment thing, it’s no fun.

  • Newlyweds ona Budget

    I also thought that I wanted to be debt-free before I bought a house, but I got an entirely different perspective from readers when I posted about it. I’m not so black and white now, I think if the opportunity came up, that we may jump at it. I definitely won’t entertain the idea of buying a house until my husband gets his firefighter job, but if that does happen, we may choose to buy before we pay off all debt. We shall see. I can’t decide! Ugh finances!

    • Jordann

      Finances are tough, but I definitely understand buying a house while in debt. For me though, my debt freedom could conceivably happen within the next few years, if it was five or six years instead, I think I’d be much more open to buying while in debt.

  • Catherine

    YES. I wish I could have bunkered down and paid off all my debt before moving on with my life but I didn’t want to put my life on hold while in debt so chose to juggle it all at once. Ideal? No. I was 26 by the time I finished my 2nd degree, just got married and had no intention of waiting 5-7 years for my debt to be paid off to buy a house or have a baby. We’re making it work but it’s tough. I CANNOT wait for it to be gone.

    • Jordann

      I think if I was in your situation, I’d do the same thing. I don’t mind putting my life on hold right now because I’m so young, but if I wasn’t going to be out of debt until my 30’s, that would be a completely different story.

  • Liquid_Independence

    I feel the same way sometimes. But I’ve been pretty lucky in general because I found a job in my field of study several months after I graduated so I was able to pay off my student loans within a few years or so. A lot of my friends from the same school didn’t find jobs right away so they’re barely able to make minimum payments on their debt while their loans are still accruing interest. I feel kind of bad for them.

    • Jordann

      I know a lot of people like that, people who are unemployed or underemployed. They certainly have a lot more to complain about than I do.

  • StudentDebtSurvivor

    Absolutely. All of your points are so valid and really hit home for me. I too started out with a lot of student debt (30K) and it took me several years to dig my way out. Bf and I just bought our first condo and I just turned 30. I think it’s much harder to get financial traction these days then it was 50, or even 20 years ago. But I’ve only lived in the here and now, so what do I know? Maybe our parents generation thought the same thing?

    • Jordann

      It’s possible that our grand parents had the same feelings, but not our parents I don’t think. My father built his own home when he was 23, and it’s a huge, sprawling thing on a big property. He had it paid off in his 40’s, all while getting a small business off the ground. My fiance’s father bought his house for cash in the 90’s. Those two stories would be completely unheard of these days.

  • CanadianBudgetBinder

    The more I read of this the more it reminded me of us. We were essentially the same way. We did whatever it took to stay out of debt and save money as anything could have happened. I had to go back to school and didn’t know where I would get a job etc. Having no debt took a huge burden off of our shoulders and it still does today. I wouldn’t trade it for anything. Sure, people job hop to gain experience in different industries but it’s a risk that they take…. then again isn’t every job? Cheers

    • Jordann

      I’m glad that you think becoming debt free is a worthy endeavour Sometimes I just want to give it all up and go be “normal” for awhile.

  • holly

    We have managed to do quite well but a lot of it has been luck and being in the right place at the right time. We do work in one of the most stable employment fields ever…..the mortuary business!

    • Jordann

      That was a very wise decision! At least your job or job prospects will always be bright…or, err…dark?

  • OutlierModel

    Debt is the enemy of millennial prosperity… Excellent summary. We hold all the same assumptions as you with regards to employment stability, retirement funding etc. We have taken a bit longer to pay off student loan debt because we have wanted to start contributing to retirement saving now rather that forego the compounding interest. Its about finding the right balance for you personally – keep building the wall!

  • Bridget

    Solid post. I love looking at things from a generational point of view, and I do think millenials face different challenges than other generations, but I also think everyone has their own battles to fight. I’ve been lucky: my debt is nearly gone, I have one of those pensions that are rare as a unicorn, and many of the life “goals” other people have aren’t even wants for me (marriage, house, etc). Still, it’s not easy.

  • Mo’ Money Mo’ Houses

    I do find that us millenials have a lot of hard stuff to deal with. Most of us are in debt after school, then have a hard time finding a job, then might be the first to go if there are any lay offs. I totally agree that getting out of debt fast is the best way to give yourself a stable financial footing so good on you!

    • Jordann

      Hey thanks! It’s definitely an uphill battle, but hopefully it’ll be worth it in the end.

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  • Sharon Gilman

    “suspended in 20-something purgatory” … I’m loving that phrase because I can relate to it SO WELL! Purgatory is exactly what I feel like I’m experiencing right now, money wise. Can’t get married, can’t have kids, can’t buy a house… until debt is paid off. In the meantime, I’m enjoying your blog about it, lol. It’s just nice to know I’m not alone! :)

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  • Carly Boulier

    YES YES YES! I can’t possibly think about having kids until I dig my way out of my $44k debt, beef up my emergency fund, and save for a down payment on a house. Then, maybe, kids will be in the plan. I’m 23 and married for 3 years, yet I’m more concerned with debt than babies. Thanks for totally getting it. – Carly @ The Milspouse Foodie