Consumers in their 20s and early 30s are now deeply in debt as a result of mismanagement of their credit card accounts, sky-high student loans and other financial hardships, according to a report from the Arizona Republic. The tough job market, which has made it difficult for many recent college graduates to find a job that pays well, has also contributed significantly to young people’s financial problems.
Another possible reason for the credit crunch many young Americans are feeling is that they have not learned reasonable repayment practices from their parents, the report said.
[Resource: Want a Student Loan? Take the Test First.]
“Most young adults see a credit card being used every day by their parents, yet rarely do those same teenagers see the credit being paid off,” Sharon Lechter, a financial author and certified public accountant based in the Phoenix area, told the newspaper. “This builds in the expectation of instant gratification.”
Many consumers, particularly those in Generation Y, don’t learn about proper financial practices until their debts have mounted to uncommonly high levels. Often, it will take them years to repair the damage they have done to their finances in a relatively short period of time.