Surprise! Young Adults Have Smartened Up About Debt

Credit cards, with their high interest rates and exorbitant fees, have often trapped college students and other young adults in debt spirals that can be almost impossible to escape from.

However, the latest generation to hit young adulthood has learned some lessons that their older peers didn't -- and that's helping many of them avoid the credit-card trap.

Young adults have gotten a lot smarter about using credit cards, according to the most recent data from credit-score company Fair Isaac and its FICO Banking Analytics blog. Outstanding credit-card debt has fallen by nearly a third during the past five years, with the average outstanding balance among those 18 to 29 now standing at just $2,087 compared to $3,073 back in late 2007.

Moreover, a rising number of young adults don't even have credit cards at all.

In 2005, only about 9 percent of young adults went without a credit card, but that figure has jumped to about 16 percent, about double the rate among those 30 to 39 who don't have any credit cards.

 

READ MORE:  http://www.dailyfinance.com/2013/06/19/young-adults-smarter-about-debt/

Three Simple Steps: Managing Debt

Being in debt can be one of the most overwhelming financial challenges you'll ever face. That's one reason that Americans have worked so hard to break themselves of their debt habit, with the Federal Reserve Bank of New York having reported recently that debt levels have fallen by $1.45 trillion since the third quarter of 2008. In particular, credit-card debt is down more than 20 percent over that time frame, reflecting the priority of getting high-interest-rate debt paid down fastest.

Even if you have a lot of debt, don't panic! You can get your outstanding loans under control if you take a long-term view and start taking baby steps toward better managing your debt. Start out with these three simple tips:

1. Order your credit report from AnnualCreditReport.com, which is the free website set up under federal law to provide copies of credit reports to all Americans. You can get one free report every year from each of the three main credit-reporting agencies, and the report will tell you what loans and cards you have outstanding, how much you owe, and your payment history, including any late payments or delinquent accounts.



READ MORE:  http://www.dailyfinance.com/2013/07/29/three-simple-steps-managing-debt/

4 Tips to Help 20-Somethings Manage Their Debt

Debt can be a heavy burden on anyone, no matter what their age, but increasingly, young adults are starting out deeper in the hole. A recent report from credit-score provider FICO shows that student loan debt has climbed dramatically for those ages 18 to 29, with average debt rising by almost $5,000 from 2007 to 2012.

The good news, though, is that young adults are taking steps to get their overall debt under control, reducing their balances on credit cards and their debt levels for mortgages, auto loans, and other types of debt. With 16 percent of 18- to 29-year-olds having no credit cards, young adults are getting the message that managing debt early on is essential to overall financial health.

With the goal of managing debt levels firmly in mind, let's take a look at four things you should do to manage your debt prudently and successfully.

1. Get a Handle On What You Owe.

In managing debt, the first challenge is figuring out all of what you owe. By pulling a free copy of your credit report from annualcreditreport.com, you'll get a list of loans and credit-card accounts that major credit bureaus think you have outstanding, along with contact information to track down any unexpected creditors that might appear on the list.

READ MORE:  http://www.dailyfinance.com/2013/08/08/debt-management-tips-20somethings/

4 Tips to Help the 50-Plus Crowd Manage Their Debt

 

Letting debt overwhelm your finances is bad news no matter when it happens in your life. But for those 50 and older, it's even more important to rein in the negative side of your balance sheet and get a handle on paying it down while you're still in a relatively strong earning position.

Historically, advisors have urged those 50 and older to get their debts paid off entirely before they consider retirement. But the trends in the U.S. show that advice is hardly being followed. The Harvard Joint Center for Housing Studies cites Census Bureau data showing that median debt levels have risen at a much faster rate for older Americans than for other age groups.

Specifically, the median debt level for people ages 55 to 64 rose by more than 60 percent between 2000 and 2011, while those 65 and older saw an even more dramatic increase -- nearly 120 percent -- during the same period. The JCHS also observed that among those 65 and older, the percentage of households with mortgage debt doubled to 40 percent in 2010, while among those ages 55 to 64, 70 percent now carry mortgage debt, citing the Federal Reserve's most recent Survey of Consumer Finances.

That's not the direction you want your finances going. As your future earnings prospects dwindle, it's more important than ever to get debt under control. With that in mind, here are four things that those 50 and older should consider.

 

READ MORE: http://www.dailyfinance.com/2013/08/15/debt-management-tips-50-plus/

4 Tips to Help 40-Somethings Manage Their Debt

Handling debt is a challenge for those of all ages, and the problems start early in our adult lives. It's only natural to incur some heavy debts in our 20s and 30s, as we're dealing with the imbalance between our relatively scarce financial resources and the sizable expenses of getting started with careers and families.

By the time you hit your 40s, you might hope to have moved past that phase. But although many people in their 40s have well-established careers that produce sizable incomes, they also often face growing financial commitments -- both to themselves and to family members. That's a big reason why 40-somethings have the highest levels of debt of any age group, and unlike younger groups, they've seen their debt levels increase slightly since 2005, according to figures from the FICO Banking Analytics Blog.

Debt management in your 40s isn't just about paying down debt. It's also about making sure you're using the right kind of debt to handle the most important expenses you face. Also vital -- maintaining the ability to repay your debts while simultaneously ramping up savings for your longer-term goals.

To address all those issues, here are four things that 40-somethings should keep in mind in dealing with their debt.

1. Anticipate Big-Ticket Expenses.

Dealing with unanticipated expenses can break the budgets of young adults. But by the time you hit 40, you have plenty of life experience behind you and can predict what sorts of financial demands will come up. In particular, major expenses like putting children through college or replacing a vehicle are fairly easy to foresee. The smarter you can be about planning for them beforehand, the better you'll be positioned to minimize how much debt you have to take on to pay for those expenses later.

 

READ MORE:  http://www.dailyfinance.com/2013/08/14/debt-management-tips-40somethings/