In one of the previous articles, we covered the topic of debt collections from Millennials. Today, we take the other side of the barricades and talk about another debated industry’s issue — the debt situation of Gen Xers. We’ll see the real image of Gen Xers’ debt and explain what they should do to change their situation for the better.
Do you Recognize yourself from this Persona?
Right off the bat, let’s start today’s topic with the following image. Does something look familiar to you from it?
- Gen Xers have the highest debt among other generations, including credit cards and mortgage and tuition debt. They pay their Baby Boomer parents’ and Gen Z children’s expenses, primarily Social Security and pensions for their parents.
- As a result of high mortgages, the average household debt of Gen X is almost twice the debt of Millennials, another “frontrunner” age group in terms of the debt situation.
- Also, their credit card debt peaks at an average of $9,000.
- In contrast with more conservative Baby Boomers, they have a more “flexible” attitude to various banking tools and use both physical (when it comes to helping parents pay their bills) and digital (often, for themselves and to pay for children’s tuition) banking. Yet, when withdrawing money, they still rely on ATMs.
The Level of Stress is Rising with the Debt
Forced to shoulder the consequences of the Great Recession and high tuition costs, Millennials carry one of the highest amounts of debt among age groups. Though Gen Xers have another excuse, they are just as stressed Millennials are about their debt situation.
A couple of years ago, Business Insider came up with interesting statistics about debt stress. Generally, more than half of US Gen Xers feel stressed about their debt, but here are more insightful stats:
- Over 54% of Gen Xers have credit card debt, and more than 64% of them are stressed about it.
- Over 24% of Gen Xers acquired personal loans, and more than 62% of them are stressed about it.
- Over 15% of them deal with student loan debts, and more than 62% of them feel under stress.
As we can see, Gen Xers are most stressed about credit card debt. Also, most of them say that student loans they take for college aren’t worth it.
Consequently, 40% of them rate their financial health “bad” or “not good.” Half of them believe they earn less than other age groups. Another factor that adds to the overall stress is the preparation for retirement. Only around a half of Gen Xers have a retirement account and contribute to it, while most of them don’t have it, speaking of such most likely reasons as lack of funds and unemployment.
The situation is clear, and those who found themselves in the description now see that they are not alone in their debt situation. Now, to the practical part.
Best Tips to Take Control of the Debt Situation
But there’s the light at the end of the tunnel, and it’s closer than it seems. As Gen Xers become more open about their financial situation by talking more about it, there’s a way to help them. In practice, there are at least several actions you can take to change the situation for good.
The persistent “American dream” about living in the suburbs, having a family with two children, a car, and other conveniences seems more like a stereotype. Some of these things — to the very least, life in the suburbs — may not make sense in reality, so you may lower your expectations and see that life costs less than you think.
Lower-cost life means that you have less debt and less stress, with the opportunity to enjoy things like more civic engagement and living in the community.
Reorganize your Budget
To pay off the current debt, first, stop adding up to it. Probably, you have some habits that may even lead to overspending. The overspending itself can be a habitual action! Pay attention to how often you buy new clothes or order takeout food — are all those purchases necessary, or you may do it less frequently and save more money in this way?
Pay Steady, Pay in Time
If your credit payments exceed the minimum due regularly (for example, each month), make sure you make them on time. To ensure that regularity, consider setting up automated payments from your credit card to ensure you progress in paying off the debt and keeping your credit score safe.
Consolidate your Debt
If you consolidate your debt onto a balance transfer credit card, with a credit rating of good to excellent, you will have better chances to get a zero-percent credit card APR for the period of 12 to 18 months. Then, you can transfer your high-interest debt to this new card and pay it off without extra percent before the “zero-interest period” expires.
One more important thing you need to do to improve your debt situation is to trust the right online debt negotiation software providers, such as Paydit. Why Paydit? Because it takes care of your current credit situation by offering individual debt repayment plans based on it. You may choose one of the provided plans or try to renegotiate the offer towards lower sums or the extended repayment period.
For collectors, the workflow is fully automated, meaning that consumers can pause negotiations to consider your offer and then pick up where they left off. Paydit does everything to make debt repayment non-stressful to you and your consumers!
Request a Paydit demo now
and see in action how it reimagines collections.