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New families need to make smarter financial decisions because they are becoming much poorer as time goes on. Yesterday, I wrote about average family debt for an American and wondered if young families carried more debt than the median family debt of $75,600. I found the answer today and it is yes.
According to a report released by the New York Fed in 2007, families with parents under the age of 35 had a median debt level of $100,700. The age demographic with the highest median debt was those between the ages of 45 and 54 with a median debt of $148,500. Only those 75 or older carried a median debt level under the median for all families.
However, I was more alarmed by a report by the Pew research center showing that Generation X families are 68% poorer then Baby Boomers were at their age 17 years ago. According to Pew:
Pew’s data summarizes all wealth, which means total assets minus debt. The numbers hold up when looking at raw dollar amounts, Pew found. The average family headed by a senior citizen now has $170,494 in net wealth, compared to $120,457 among families of similar ages in 1984.
Younger families are headed in the opposite direction. The average family headed by adults under age 35 had $11,521 in assets in 1984. Today that has dwindled to $3,662.
Pew cites a number of factors challenging the wealth prospects of Generation X including:
- Waiting to be married,
- Taking longer to start careers,
- Inflated housing market,
- More college debt
- And rising student loans.
Hopefully this is a wakeup call for the millennial generation that is facing even more college debt, higher rates of unemployment and lower wages. Currently, they have roughly 33% less debt than Gen X families. It will take a lot of financial discipline to overcome the trend of poorer families that Generation X families have set.
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Thanks for the mention! I appreciate it.
Any time!
Lack of education..and lure of advertisements are main two culprit to me..
Great article, Shaun and congrats on the linkage. Quick question: does the Gen X debt figure include mortgage debt?
Love the progress here at your site
Thanks Tim! Hopefully you’ll be joining me soon
The stats include all debt: mortgage, credit card, car loans, student loans, etc…
I would love to, Shaun when time permits. If the stats include all debt (mortgage, credit cards, etc) then I can easily surmise that southern California Gen Xers are in far worse than the national stats indicate.
Wow. It’s really eye opening to see how the different generations have it.
Agreed. It’s very thought provoking. I was surprised that total debt per family spiked between 35 and 55. I would have thought it would have been earlier.
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