Personal Finance Benchmarks for 20 Somethings – Debt

I was recently turned on to a site that has a slew of metrics for 20 somethings. I have been searching for some time for data like this so I can compare our household finances to that of our peers. In turn I hope to find out that we are doing better or worse.

The metrics I found were located here.

All the data for these stats came from the Survey of Consumer Finances, Federal Reserve 2007.  This data is interesting as you can separate the numbers by income further breaking down the measurements for a more meaningful interpretation. So the data might be a bit dated and will not include any changes from the “Great Recession.”

My next several posts will be looking at different metrics and comparing my wife’s and my personal finances to these benchmarks.


The first subsection I will explore is Debt.

According to the stats:

80% of 20 somethings have debt

94.4% of 20 somethings in our income range have debt ($40,000-$60,000)

I am not sure if it is comforting to know that we fall within 94.4% of our peers, but I guess company is company.

45.4% of 20 somethings have credit card debt

61.6% of 20 somethings in our income range have credit card debt ($40,000-$60,000)

Now this stat is comforting. My wife and I have temporary credit card debt weekly which we in turn pay off before any interest is accumulated. We have stocked up 25,000 world points (which I discussed earlier is only a 1% earning) through this process. So not only have we beaten the majority of our peers, but we have made a bit of change in the process!

34.7% of 20 somethings have student loan debt

40.9% of 20 somethings in our income range have student loan debt ($40,000-$60,000)

Now I am unsure how to interpret this data. There could be several things going on. First, one would assume that the majority of college students are people in their 20s. Maybe this assumption is wrong, but as you go through the 30s, 40s, 50s+ the % of people with student loan falls, so this assumption is probably correct. That argument does little to explain why such a small % of 20 somethings have student loan debt. If anything one would assume it would be higher.

A second assumption is that maybe many college students are graduating with no student loans. Maybe parents are paying 100% of peoples rides. Maybe more students are working their way through school with no debt. I find this theory also unlikely as the majority of podcast, problems, and other financial blogs out there concern student loans. These could be the vocal minority through.

The final assumption, and the one that may be impacting this study is a failure on my part to realize how many people do not attend college. I am not attempting to be elitist, but rather after spending the last 6 years of my life on a college campus involved in that life you just come to assume that college people are everywhere as that is primarily the only people you interact with.

Now that I am outside of the “college bubble” I start to hear more and more about the growing high school drop out rates, teen pregnancies, and other issues impacting today’s grade and high school youth.

The assumption that the majority of Americans in their 20s carry no student loan debt is, in my guess, two-fold. There is a minority of students (say 10-20%) who are lucky and have a full ride through school through work or parents’ generosity, and a much larger majority of students (40-50%) fail to make it to college and in turn do not incur any debt.

In these paragraphs I am looking purely at a population that would attend college. I know there are thousands of jobs in the American economy that require no college education and can pay very well. I am not an advocate that college is for everyone and on the contrary believe that there should be a greater emphasis in American high schools on placing kids into the right programs (technical schools, programs, and job placement) and less emphasis on every kid in college.

63.4% of 20 somethings have installment loan debt

74.3% of 20 somethings in our income range have installment loan debt ($40,000-$60,000)

I am making an assumption here believing installment loans to be primarily auto though it surely contains other sources of monthly payments outside of the other major categories (student, mortgage, credit card) loans.

Again my wife and I have beat the odds and ended up being on the good side. We currently have no auto loans or other installment plans and in turn have that much less pressure on our financial peace.

24.0% of 20 somethings have a mortgage

33.2% of 20 somethings in our income range have a mortgage ($40,000-$60,000)

Now this is a tricky one to analysis. Yes, my wife and I do not currently have a mortgage. So we are in the majority of people in our age group who are most likely renting or living with our parents.

I find unnerving the number, and acceptance, of “boomerang” kids (kids who go to college, graduate, and return home to live with their parents) have today. When is a kid expected to grow up, take responsibility, and learn to live on their own? While there are uncontrollable circumstances in the world that can force a kid to temporarily live with their parents (1-2 months) the number of kids living with their parents 1-5 years is insane. Growing up it was a fact that at 18 I was an adult. My mother wished me the best in my endeavors, sent me to college, and proceeded to redecorate my room even before I left. Growing up with that expectation of being required to fend for myself at 18 forced me to confront my future adulthood and be a stronger adult for it. I can now live in the current world, pay my bills, and support my family… I believe many of those skills are inhibited from being fully developed by parents wanting to give their kids some more time to “grow up”.

Now even though today, at age 25, we do not have a mortgage it is a goal of my wife and I to purchase a home in the next 2-3 years. So, we may still fall into this minority of 20 something home owners in the not-too-distant future.

In conclusion, in relation to debt I feel my wife and I stood up pretty good against the national averages of our peers. We tended to be on the right side of the various debt ratios and appear to be on track to go into our 30s financially successful.

How did your own personal finances measure up?


About odysseustoday

25 year old man starting his financial journey.
This entry was posted in Education, Expense Management, Finances, Financial Tools, Graduation, Graduation Finances, Personal Finances, Resources, Student Loans and tagged , , , , , , , , , . Bookmark the permalink.

4 Responses to Personal Finance Benchmarks for 20 Somethings – Debt

  1. Yikes, debt is pretty huge these days…. I’m in debt too and a 20something so joining that metric.

  2. Mary (cuz) says:

    Don’t forget that the concept and view of “boomerang” kids is cultural. In Asian cultures (predominant culture where I live, which is the U.S. so stats also come from here), it is normal/expected for a family to live together in that manner. It is not uncommon to have multi-family homes with 20-30 people living in it. It would be multi-generational, the grandparents stay home and care for the grandchildren, while the middle generation works and pulls in the income for the group. It would be very unusual here to have an unmarried child (even if 40 or 50!) not live with parents. It’s also a result of being the #3 least affordable place to live because of a housing shortage/limited land to develop. Also plenty of people without mortgages b/c a home is usually the family home passed down many generations…the equity that these homes continue to build becomes almost like a third source of income. So just pointing out that what may be the norm in your neck of the woods isn’t necessarily the case across the US for reasons deeper than what we’re thinking.

    • Mary,

      Thanks for bringing this point-of-view to the blog. I agree 100% with your comment and have found it to be also present in Hispanic cultures he in Texas.

      That being said, I still believe that the majority of the “boomerang” generation are not returning home for cultural reasons. Without exposing our children to the reality of living in the world parents are doing a disservice in my opinion. Over the years the lines between child and adult has become more and more blurred as life expectancy, education requirements, and in some small way parents unwillingness to let their children struggle has increased over time. No longer is a boy become a man at 16, or that girls become women at age 12 (though there are cultures in which these are still true) in American Society. The Law states you are an adult at 18. By setting that age, if for no other reason than the fact is it the age at which the United States Government considers a person legally able to make decisions for themselves, a parent can start reinforcing the message “you are an adult” and slowly loading the responsibility of adulthood.

      In a blog it is difficult to break down a topic like “boomerang” generational pros and cons into 1,000 words of less. I would love to talk to you more as I have several other major changes in American Culture that has lead to a “dispersion” of wealth that may have had and is having a major impact on why “kids” are not taking on the responsibilities of adulthood as well as they did in the past. Also, remember your speaker. I still have a lot of life to live and am only speaking from the education and experiences I have had thus far. That is one of the great joys of being human, our thoughts and opinions can change over time as new information is had.

      Again, thank you for the comment and helping round out the topic of “boomerang” kids.

  3. A great deal of debt and obligations with onset of 20s; had never known about these statistics before; not easy to believe the dilemma you go though until you are into your 30s

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