Into each life some debt must fall, to borrow the famous adage about rain. And, in the same way that April showers bring May flowers, the right kind of debt in the various stages of life can cultivate a prosperous future. Your first student loan, car loan or mortgage, for example, is often viewed as a rite of passage.
But with total consumer debt in the U.S. now approaching$17 trillion,1it's critical to get a handle on the differences in debt by age group and the unique circ*mstances facing each generation to make sure you aren't flooded by debt.
From Gen Z to Baby Boomers, here's a breakdown of each cohort, the types of debt they commonly carry and their average debt loads—which you can use as a benchmark to compare yourself against.
Average American Debt Load
The average American owed $103,358 in consumer debt in the second quarter of2023, the latest data available, according to credit bureauExperian.2That breaks down into $241,815 on average in mortgage debt, and an average of $23,317 in non-mortgage debt (including credit card, student loan, auto loan and personal loan debt).
But these debt balances vary greatly depending on age group. To get a truer picture of debt in America, you need to drill down by generation, as detailed below.
Gen Z Debt
The adult members of Generation Z (ages 18 to 26) are at the age where they're starting to accumulate debt—especially through student loans and car loans. While some in this cohort may have purchased a home, many are still relatively young and continuing to live at home, so it's certainly not the norm for this age group.
Compared to the other generations, Gen Z has the lowest average credit card debt load and is second only to the Silent Generation (age 78+) for average non-mortgage debt overall. This is important because too much non-mortgage debt—especially high-interest credit card debt—can become a drag on a young adult's ability to save in preparation for the next financial stages of life.
If you're in this cohort and trying to keep debt to a minimum while in school,part-time incomecan be part of the solution, as can thesereal-world tips to help Gen Z increase savings.
Average Gen Z debt by type
| Type of debt | Average amount |
| Mortgage | $229,897 |
| Credit card | $3,148 |
| Total non-mortgage* | $15,105 |
Source:Experian, Q2 2023; *includes credit card, student loan, personal loan, and auto loan debt
Millennial Debt
The average mortgage balance for Millennials (ages 27 to 42) is the highest among all age groups. This tracks, given that homeowners in this cohort would likely have purchased their home more recently and be closer to the beginning of their amortization period than older homeowners.
At the same time, most Millennials will have finished their postsecondary education, sostudent loans are a major factor; and many will have taken on car loans as they enter the job market and develop their careers. Also an increase in expenses as Millennials start to raise families often requires additional credit. Not surprisingly then, credit card balances and total non-mortgage debt swell at this stage—they're about twice the size of Gen Z's.
Average Millennial debt by type
| Type of debt | Average amount |
| Mortgage | $295,689 |
| Credit card | $6,274 |
| Total non-mortgage* | $29,702 |
Source:Experian, Q2 2023; *includes credit card, student loan, personal loan, and auto loan debt
Generation X Debt
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt. This is indicative of the competing priorities at this life stage, including raising tweens and teens (and possiblysaving for their college education), paying down mortgage debt and saving for retirement.
Indeed, those who are ages 45 to 54—prime Gen Xers—spend the most of all age groups on pensions and Social Security, according tofederal dataon consumer spending in 2022.3To see how you measure up on your own retirement savings, check outthe median retirement savings by age.
Average Gen X debt by type
| Type of debt | Average amount |
| Mortgage | $277,153 |
| Credit card | $8,870 |
| Total non-mortgage* | $32,190 |
Source:Experian, Q2 2023; *includes credit card, student loan, personal loan, and auto loan debt
Baby Boomer Debt
Boomers (ages 59 to 77) have had more time to pay down their mortgages, and so have lower mortgage debt than their younger counterparts. At the same time, however, many Boomers are now retired and may find that their retirement income falls short, especially during this period ofhigh inflation and rising prices. As such, some might be tapping into the equity in their properties or turning to credit cards (this cohort has the second-highest average credit card balance of all the age groups) to cover expenses such as home improvements or healthcare costs.
While Medicare covers some expenses for retirees,there are many out-of-pocket costs, including dental services orlong-term care, leading some to purchase private insurance.4According to 2022federal dataon consumer spending, households led by someone who is 65 or older spent the most of all Americans—an average of $7,540 annually—on healthcare costs, including health insurance, medical services, drugs and medical supplies.3
Average Baby Boomer debt by type
| Type of debt | Average amount |
| Mortgage | $190,441 |
| Credit card | $6,601 |
| Total non-mortgage* | $19,203 |
Source:Experian, Q2 2023; *includes credit card, student loan, personal loan, and auto loan debt
Tips to Help You Reduce or Manage Debt
Even if your total debt load is below average for your cohort, it's still important to keep debt in check relative to your income. If you find that you're struggling to make your debt payments, or you have little left over to put towardmonthly savingsfor retirement and other priorities, your debt load is too high. Here are some practical tips for reducing debt:
- • Develop a budget to track your income and expenses.
- • Identify areas where you can cut costs and allocate more funds to debt repayment.
- • Create a debt repayment plan and stick to it.
- • Prioritize paying off high-interest debt first, or consider consolidating your higher-interest debts into a lower-interest form of credit.
- • Seek guidance or education to make informed decisions about managing debt, investments and long-term financial planning.
Final Word
Each generation faces unique challenges and opportunities when it comes to debt, so it's crucial to adapt your financial strategies as you move through life's different stages. By being proactive, you can improve your financial well-being and secure a more comfortable future, regardless of your age.
Ready to tackle your debt? Consultthis checklist for getting started on your debt management journey, and check out these5 tips to help you reduce debt at any age.
Tamar Satov is a freelance journalist based in Toronto, Canada. Her work has appeared in The Globe and Mail, Today's Parent, BNN Bloomberg, MoneySense, Canadian Living and others.
READ MORE:The Ultimate Guide to Personal Finance
Sources/references
1. & 2.Experian Study: U.S. Consumer Debt Reaches $16.84 Trillion in Q2 2023.Experian. 2023.
3.Consumer Expenditure Surveys. U.S. Bureau of Labor Statistics. September 2023.
4. Mercado, Darla.Retiring this year? How much you'll need for health-care costs. CNBC. July 18, 2019.
