Young adults (under 35) have less debt today than their counterparts did in 2007. Good news? Well, not so much… I don’t think the lack of debt is because today’s youth have all of a sudden become financially responsible, I think it’s a sign of the crappy economy.
Sure they don’t have a mortgage, but they don’t have a house either.
Young people don’t have more debt because they don’t have a job. …or a car. Not for lack of wanting, but the lousy job market has thrown a wrench in the idea of home ownership for the majority of younger adults. Many of these generation “Y’ers” or whatever-they-are’s, have found themselves fresh out of college with no prospect of a job. A huge majority have made their way back home to their parent’s house with a pocket full of school debt and a crushed enthusiasm for the future.
I have to hope that in addition to just being unable to qualify for new debt that these young people are being cautious in this difficult economic time and are thinking twice about even applying for a loan.
For now, the no-debt Millenials have spawned a generation that rents most everything. There is something to be said about renting things instead of buying. Here’s a look at a few things that makes more sense to rent than own.
- Tools — Everyone should own at least a basic toolbox, but when it comes to bigger tools that you would only use occasionally or for that special project, renting can save you a ton of money. For instance, you can rent a 20-inch gas chainsaw at The Home Depot for around $60 a day – if you were to buy one, you’re looking at $200 – $500. I’ll take that savings any day.
- Textbooks — If you are still in school, a good way to save a few bucks is to rent those pricey books. Places like CampusBookRentals.com rents new and used books for way less than the cost of buying one.
- Bicycles — If you aren’t a huge bike enthusiast or only go biking once in a while, renting a bike is a great idea. RentaBikeNow.com partners with a network of bike shops that have bicycles for rent. The best part is you don’t have to worry about where to store them.
- Camping gear — Here’s something else that takes up a bunch of room and unless you become homeless, doesn’t get used very often. Consider renting your camping supplies next time you get the urge to get back to nature.
With money short, the economy in the crapper and job prospects looking dim, it’s hard to even think about the future much less plan for it, but if you are one of the younger Americans that are currently struggling, hang in there, this have to get better (they can’t get much worse). Stick with the mentality of being cautious about obtaining debt. There will come a time when it will be easy to get a loan and you might feel the need to get yourself some new debt because you have waited so long, but don’t.
Strive to be debt free.
Keep working to the ultimate goal of having stuff, but being debt free.