It may not be an attempt at being austere but young adults in the US are wary of taking loans. Given that they are already laden with huge student loans, this may be looked at as a smart move on their part. A research by the Pew Research Center has concluded that the debts by youngsters is the lowest in fifteen years. This is no mean feat for a generation that is dubbed materialistic.
Is the youth just being cautious or are there other factors contributing to this trend? There seem to be a number of factors leading to this fact. The recession was a reality check for most youngsters when they realized they could not live a life on credit. Also, youngsters today don’t want to be bound to jobs they don’t like just to pay their debts.
They are being careful not to be carefree. This is also causing them to delay tying the knot and set up households. Stricter mortgage processes are not making it any simpler for this generation.
While the choice may not be completely voluntary, young US is aware that they are already carrying enormous student loans which they need to repay in due course. Cutting down other debts is definitely going to help them on this front.
The fact that about 22% of youngsters had zero credit balance in 2010 goes on to show how serious this generation is. Is this trend, however, spelling doom for the economy with decreased consumer consumption?
While some may worry about it, given that youngsters are looking for financial security before they spend, the economy is likely to boom eventually.