Six ways to avoid being young and in debt


HOW TO SAVE IF YOU’RE ALREADY UNDER WATER.
Millennials—those born between 1981 and 1996—have faced financial headwinds entering the workforce during or just after the Great Recession, wrestling with ballooning education costs and record-high debt levels. Roughly 43.6 million Americans hold student loan debt, with a total balance exceeding $1.7 trillion and an average borrower debt of about $38,000.1

But, while millennials have bills to pay, most acknowledge that they also need to save, and many are anxious to get started. After all, some saw their parents struggle financially and lose ground with savings goals during the recession.

Here are some tips for keeping your head above water, and building a savings plan:

  • KNOW WHAT YOU OWE.

Start by listing every loan and its interest rate. Focus on paying off high-interest or variable-rate loans first. And most importantly, understand your repayment options. If you're unemployed or under financial stress, explore deferment or income-driven repayment plans — it’s better to ask the loan company about your options than to make assumptions or to default.

  • BUILD YOUR CREDIT BY PAYING ON TIME.

Consistent, on-time payments are essential for rebuilding or maintaining good credit. It is especially important if you’re planning to purchase a home, finance a car, or apply for a small-business loan in the future.

  • CREATE AN EMERGENCY FUND.

After organizing your loan repayments, try to put aside a small amount every month for emergencies. Aim for three to six months of living expenses saved in a fluid, accessible account.

  • ENROLL IN YOUR 401(K) PLAN.

If your company offers a 401(k) savings plan, enroll. You don’t have to contribute the maximum, but if you don’t contribute at least enough to get the company’s match (if it offers one) you’re leaving money on the table.

  • MAKE THE MOST OF YOUR AGE.

Save early, save often. Take advantage of the long-time horizon for your money to grow by investing your money for the long-term. You have decades ahead of you. Plus, starting early gives your investments time to grow via compounding interest. And, if you’re considering life insurance, it may be in your best interest to purchase while you’re young and healthy.

  • PROTECT YOUR LOVED ONES.

If you pass away, your loved ones may be responsible for paying off your debt. You can protect them by purchasing group term life insurance through your professional association. Since the cost of life insurance is often highly overestimated, you may be surprised to see what the rates are. Ask us about how group term life insurance can provide options including features, costs, eligibility, renewability, and exclusions.

1“Student Loan Debt Statistics," Bankrate, July 31, 2024.

This information is courtesy of New York Life Insurance Company, used with permission. It is intended exclusively for general information only. ©2025, New York Life Insurance Company. All rights reserved.

 

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