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The Personal Finance Podcast

The Average Debt By Age and Generation (And How to Get Out Of Debt!)

In this episode of the Personal Finance Podcast, we’re going to talk about the average debt by age and generation and what you can do to avoid that debt and get out of debt.

In this episode of the Personal Finance Podcast, we're going to talk about the average debt by age and generation and what you can do to avoid that debt and get out of debt.

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Transcript:

 

On this episode of the personal finance podcast, we're going to talk about the average debt by age and generation and what you can do to avoid that debt and get out of debt.

What's up everybody and welcome to the personal finance podcast. I'm your host, Andrew founder of mastermoney. co and today on the personal finance podcast, we're going to be talking about the average debt by age and generation. And how to get out of debt. If you guys have any questions, make sure to hit us up on Instagram or tick tock or Twitter at master money co and follow us on Spotify, Apple podcasts, or whatever podcast player you love listening to this podcast on.

And if you are enjoying the show and you want to help out the show, consider leaving a five star rating and review on Apple podcasts or Spotify. Can I thank you guys enough? For leaving those five star ratings and reviews. They truly mean the world to us. And if you want to watch this, you can watch this on the Andrew Gincola YouTube channel on that YouTube channel.

You can watch the podcast and see some of the visuals that we are talking about when we have these episodes as well. Now, today we're going to be diving into the average debt by age and generation and how to get out of debt for each specific situation. And I love doing these. By age episodes a, because you guys, the audience love these episodes.

But in addition, when we do these episodes, I can really tailor some of the stuff that we are talking about to your specific situation. And we put out a couple of different polls for people on some of the biggest stuff that they are struggling with right now. And one of the biggest ones was how to get out of debt.

And so this one, we are going to go through the average debt by age. So you can see where you stack up. And then in addition, what we are going to do is run you through. Some of the things that I would do if I was that age or in that generation to get out of specific debt situations. So that is exactly what we're going to be talking about today.

Now, if you are in debt and you want to get out of debt, we have a free debt course for you at master money. co slash debt course. It will show you exactly step by step on how to get out of debt. And for people who have taken the course before we have a brand new spreadsheet that is going to be launching the same day as this episode that is going to come out.

For you guys, that is much better than even the first spreadsheet was. We spent a lot of time and money invested into making the best spreadsheet to help you guys plan and get out of debt as fast as you possibly can. And so I'm so happy to invest in that stuff for you guys so that you can get out of debt, because I want to see every single person listening to this podcast, get out of high interest debt.

High interest debt is a wealth killer, meaning any debt above a 6 percent interest rate is absolutely a wealth killer. So I want to see you get out of that high interest debt and reduce the liability and the risk in your financial life. And that is exactly how you do that. So that's why we give away these free resources.

I'm not going to charge anybody who's in debt. We want you to make sure that you actually get out of debt and are able to afford that. And I want you to put those extra dollars towards your debt. I want you to get out of debt. So. If you're interested in that, you can check that out down below in the show notes.

And without further ado, let's dive into this episode. All right. The first generation we are going to be going through is Gen Z and Gen Z actually does have debt. They are age 18 to 24. At the time I'm recording this and the average debt for Gen Z is 12, 000. 871 throughout the country. Now there is a number of different things.

We're going to break it down by types of debt as we go through each of these age ranges as well. But for Gen Z, the first thing at the top that I want you to understand is that you do not have to go into high interest debt. This world is going to try to normalize debt in your situation. They're going to try to normalize the thought process of you going into debt and Hey, Everybody else is doing it.

It's a okay for you to go into debt. But if you can avoid debt at all costs, specifically high interest debt, and I'm talking about things like personal loans, credit card debt, anything with that interest rate above 6%, I want you to try to avoid it as much as you possibly can. Why your financial life will be so much easier if you can avoid debt at all costs.

So anybody who is in Gen Z, who is listening to this podcast, you have a major opportunity right now. You are just starting off in your life and you have so much time for compound interest to work for you. Whereas if you go into debt, compound interest will be working against you. So you have the power in your hands today to make it happen without going into high interest debt.

Now there is good debt that is out there. If you are going into debt for something like a mortgage on a rental property, I truly believe that that is good debt. And that makes sense if the numbers work, when you run the numbers on your rental property, or if you're starting a business and it makes sense for you to borrow some small lump sum of money, depending on the type of business, there's a number of different factors there.

Then it may make sense for you to go into debt, buying assets with debt. I do not have an issue with, as long as you do not get. In up to your eyeballs in debt. So you have to do this cautiously. You have to de risk yourself as you go through this process. So age 18 through 24, the average debt is 12, 871 of that credit card debt.

The average is 2, 047. I do not want to see anybody in Gen Z in credit card debt. You have the information now. I'm telling you right now that it will destroy your wealth building ability. So how do you combat that? You pay off your cards every single month. And in addition, you make sure you keep that credit utilization low.

A, this is going to save you from being in credit card debt. And B, this is also going to increase your credit score over time, which is a 1 million money decision that you need to focus on having a higher credit score. It has a million dollar impact on your money. We've talked about that in the past because it lowers your interest rate and allows you to take that extra dollars.

And if you want it to, then you can focus on opportunity costs and put them towards wealth building activities. Auto loan debt for Gen Z. Hey, sometimes we have to get from point A to point B. We have to take out an auto loan, but being cautious about this, driving your cars longer and making sure you are following the 24 seven rule is going to be very, very important.

So auto loan debt, 6, 271 student loan debt. Hey, I get it. You have to take on student loan debt. Most people don't have parents who just pay in full for their student loans. So a lot of folks in Gen Z, this is going to be the majority of your debt is 14, 447 and personal loan debt. This is the one that I do not want you to have whatsoever is personal loan debt.

By now paying later is not your friend. Personal loan debt is 7, 107. So for Gen Z, that is the averages and where it comes out to. So. If I was in Gen Z, here's how I would avoid debt and here's how I would think about this process to make sure I can also get out of debt. The first thing I want you to do, and nobody wants to hear this word, is I want you to learn how to budget now.

Now there are two different ways that you can budget. Most people do not want to budget. So what do I recommend? I recommend you do what is called the reverse budget, where you save off the top for investing and paying down debt. And your emergency fund, and then you spend what is left over and what this does, it allows you to do the classic pay yourself first, then spend what is left over.

So budgeting early with the reverse budget is really, really powerful. If you want to optimize your budget, meaning you want to make sure every single dollar is going exactly where you want it to go. If you're an optimizer in that way. I recommend a zero based budget and a zero based budget is a budget where every dollar that comes into your possession needs to have a job, meaning you're allocating a job for each and every single one of those dollars.

And you're only budgeting money that comes into your bank account. You're not forecasting ahead. You're budgeting money that comes in. When it comes in. So those are the two budgets that I recommend. Those have worked so incredibly well for me. And in fact, when I was your age at the age that you are at right now, this is what turned my money around is learning how to budget.

Nobody wants to hear that, but budgeting actually equals freedom. Budgeting is free because you're allocating your dollars towards the things you want instead of allocating your dollars towards frivolous things. And you have no way to track it. So that is my favorite way to budget between those two, uh, is a zero based budget and, or the reverse budget.

And most people. Like the reverse budget. Now, the second thing I would consider is if you are brand new to credit cards, I want you until you get comfortable with them to limit that credit card use and, or if you're not responsible with them, if you're in credit card debt right now in your Gen Z, I don't even want you using credit cards until you become responsible with your money and your credit cards.

So you need to think through this. If you're in credit card debt, there is no reason for you to be using credit cards. Right now. You need to get those paid down first. Then you can come back to the credit cards. Once you feel like you're financially responsible. And I would think about it. Hey, I'm going to spend 500 this month on the credit card and the rest of it's going to go in cash until I can finally become responsible.

And then typically you can slowly increase that amount over time. Also, if you are thinking about this and you're trying to stay out of debt, one big thing that most people who are going to college don't do is they do not research scholarships and grants enough. In fact, for a lot of people, you can make this your job.

If you can reduce down the amount of money that you had to pay in college, specifically with student loans, this is a volume game when it comes to being able to research scholarships and grants. And guess what? A lot of times now you have to write papers and you have to do all these different things.

There are so many different AI tools that can help you write. These things in very unique ways. So learning how to use things like chat, GPT, or AI prompts will help you through this process as you start to learn how to research scholarships and grants. We need to do an entire episode on this because I truly believe that this was a big mistake that I made early on in my college career is I didn't research scholarships and grants enough and pursue those enough.

And if I would have done so my life would have been a lot easier. For me, my family and everybody else around me. So taking advantage of those is really, really important. Also consider the lower cost college, just going to an out of state school. For example, that is a higher cost is really not going to help you a ton in your career, unless you're going to Harvard or Yale, there are specific colleges that can help you, but for the majority of colleges out there, say, for example, you live in Georgia and you want to go to Ohio state, well, that's going to cost you three, four or five, six times the amount that it would.

If you just went to UGA or Georgia state. So there's a lot of things happening here where you got to think through these decisions because they have major financial implications in the long run. I know people who are in their forties and fifties still paying off their student loans. You do not want to be in that situation.

You want to make sure that you can lower this cost as much as possible because these numbers are just getting higher. And higher and higher and in four years, you're gonna be paying even more for college than you are right now with that sticker shock price that you already have, you can also consider community college for two years at the next to the local university that you were at, and it's gonna be much more expensive.

And then when you graduate, you're still gonna have a degree from the major college that you want to go to. But the first two years you can consider community college as you do that. Buy used cars. There's nobody in Gen Z who needs to be bawling out with a brand new car if they can avoid it whatsoever.

Because used cars in the first three years take that major depreciation hit that we all want to avoid. So buying used cars is a great option for a lot of people. Opt for a reliable car. I like two to three years used that have already taken that depreciation hit, so I don't have to take that depreciation hit on my own hard earned dollars.

Learn to live frugally. So when you are early on in your twenties, I am very pro living frugally. It is what I did very early on. I know a lot of people who have done so because most people in your generation try to look like they have way more money than they actually do. And what's going to happen here is that most of them.

Do not have that money and, or it's been handed to them by somebody else. And so if you try to live frugally, like you did in college, when you get your first job, for example, then it's going to allow you to take those extra dollars and put them towards investments. And those investments are so incredibly valuable.

I cannot state how valuable those investments are. They will change your life. If you start investing very, very early. And then lastly, obviously avoid these unnecessary loans by now. Pay later is not your friend. All of these personal loans are not your friend. The average Gen Z person having a personal loan of 7, 107 really is not a good thing that disturbs me.

So making sure that you stay away from personal loan debt is very, very important. Now let's get in to the millennials. All right. So first we are going to get into the younger millennials and the younger millennials are aged 25 to 34. And so when we go through this with the younger millennials, they have a much higher average debt.

So their average debt is creeping up to 42, 258. Now, younger millennials, if you haven't started investing yet, you haven't started getting your money, right? We have a ton of younger millennials who listened to this podcast. I want you to start really thinking about. The ways that you can get your money, right?

A getting out of high interest at anything above 6 percent is going to be very, very important for you and your longterm financial gains. The gains of your family, your generational wealth, everything that surrounds you is going to be majorly impacted by how much debt you take on specifically high interest debt at that is not for assets.

So making sure that you get out of some of this stuff is going to be very, very important. So younger millennials have credit card debt in 4, 868 is the average. The auto loan debt is. $17,748. Student loan debt is $33,984, and personal loan debt is rising, and I cannot believe these personal loan debt numbers, $11,819.

So we're trying to go through this with you guys to make sure that you can kind of reduce some of these debts. The personal loan debt is one that is really, really hard for me to swallow. I can't really understand why people are taking on that much personal loan debt. For a lot of people, if you have this personal loan debt, if you have credit card debt, those are the big two that are going to probably have really, really high interest rates.

Meaning for the majority of folks, that high interest rate is going to be something that you really want to take care of and you want to take care of as fast as you possibly can. So what are some things that you can think about? Right now, this is not a popular time to talk about this, but in the future, it will be when interest rates start to drop where you need to be looking at your student loan rates.

And once your student loan rates start to drop again, depending on what your rate is now, then you need to refinance those student loans. If you graduated within the last couple of years, your rate may be really high. If you graduated back in 2020 or before your rates, probably a lot lower than it would be right now.

So if you have that low interest rate, I would keep that student loan for a longer period of time. This is very popular right now because now. At the time recording this, a lot of people are going to start paying back their student loans. So when those rates drop, if you have an interest rate above 6%, you need to look into refinancing that student loan rate.

Also any high interest debt needs to be prioritized first. So we think that you need to order your debts from high interest rate to lowest interest rate. And those high interest debts really need to be paid down first. So if you have, for example, a car loan that is at. 7 percent and you have a student loan that's at 3 percent that car loan needs to be paid down first before that student loan debt because mathematically it will be paid down faster.

We call this a debt wrecking ball method because you're trying to get rid of that debt as fast as you possibly can. If you take the course, you will see that that's what we talk about in the course. The next thing you also need to be doing is making sure you have some sort of emergency fund established.

You don't want anything interrupting your wealth building ability, or you don't want anything interrupting the ability for you to be able to pay down debt if you are in debt. So you need to have that emergency fund in place to protect your wealth over time. Now we want you to get rid of that high interest debt as fast as you possibly can, and having that.

Emergency fund buffer is going to be really important for most people that emergency fund buffer is going to come right around 4, 500 somewhere in that range at the time recording this. But if you have that cash buffer, then you go towards that high interest debt. Then you can build out that larger emergency fund after if you've never heard about what we're talking about here, this is part of the stairway to wealth and the stairway to wealth you can check out as the Step by step guide on what to do with your money.

That's why we call it the stairway to wealth. And so for the stairway to wealth, you can check that out at mastermoney. co slash stairway to wealth. If you've never heard of it, 3. 0, by the way, is coming out very, very soon. Now you also need to be doing, obviously all the things that we were talking about with Gen Z, but you also need to consider limiting lifestyle inflation.

This is where people can get in major, major trouble is between age. 25 and 34. If they start to establish the wrong habits and you have lifestyle inflation creep in some lifestyle inflation is good. I want you spending your dollars on the things that you love and the things that you value. But if you allow lifestyle inflation to creep in above your income level, that's where the problem comes.

Cause then you have no extra dollars to put away towards your retirement or investments or all these other things. So you need to limit your lifestyle inflation. As your income increases, make sure you also take a portion of that and put it towards your wealth building ability. Now, if you have these student loans, maybe you can find ways to consider student loan forgiveness, look for all the options for student loan forgiveness out there, because this is a high dollar per hour activity that you could be doing and seeing for your specific situation.

Is there a way to get student loan forgiveness? And some people, even their employers may help pay for their student loans and, or they will help pay for additional education. If you want to go get your master's or something like that, I would take advantage of that because there's nothing that can hurt and it can only help you in the future.

And then also I want you to automate your savings. So automate your entire financial system. We have a course that we are working on, which is going to be talking about this on how to automate your entire financial system. And so if you're interested in that, make sure to reach out to me and I will get you on the specific list and maybe even get you in some of the beta stuff that we are doing so that you can see that course early before everybody else.

And then lastly, if you are in a really, really bad situation, then maybe you want to seek financial counseling. If your debt is super, super high, maybe you went to school, you realized later on that you have a couple of 100, 000 in student loan debt or you're in major, major debt. Then I would go out and seek financial counseling to have somebody help you with your personal situation.

I would also have a CPA on my. list to have them look at my situation and help me with my taxes. And so reducing those taxes, make sure you take that tax refund and put it towards high interest debt. And so you can have all that stuff put together with financial counseling. So between all of those things, those are going to be really, really important in order to prioritize that high interest that I want you to get rid of high interest debt as fast as you possibly can.

Now let's get into the. Older millennials between the age 35 to 44. All right. Older millennials, age 35 to 44. The debt keeps rising as your ages progress. And for a lot of people, we want to make sure that we consider this. Now I want you to think about this at the top of the show. I haven't mentioned mortgage debt one time.

Why? Because this is all the debt outside of mortgage debt. A lot of people have more debt if you own a house. And so. A lot of times mortgage debt can be a high interest debt at the time of recording this because interest rates are so incredibly high. So you got to make sure that you were thinking about that as well, but we are just talking about debt outside of mortgage debt today to make sure that you can get that paid down.

So older millennials age 35 to 44, the average debt is 39, 981. And of that is credit card debt of 7, 257. Now listen. If you have credit card debt of 7, 257, that is priority. Number one, those always have the highest interest rates. And I want you to attack that credit card debt, like a nothing you've ever attacked before in your life.

Why? Because credit card debt will destroy your wealth building ability. And especially as you approach these ages where you're 35 to 44, if you're an older millennial, you need to prioritize this because it will significantly reduce your financial stress throughout your entire life. Auto loan debt, 20, 095 student loan debt is 39, 981 and personal loan debt is rising at 13, 670.

These are massive amounts of debts for people who do not have mortgage debt, 39, 981 is a large amount of debt. Auto loan debt is significantly rising as well over time, each and every single year, it's going up more and more and more. In fact, credit card debt hit over a trillion dollars at the time of recording this.

And so we need to reduce that as much as possible. We really, really do. So as we go into this, the first thing I would consider. Is if you have a bunch of different credit cards, for example, and you have a bunch of them with a high interest rate, maybe you want to consider something like a debt consolidation.

Now you got to make sure there's no fees involved with this, and you got to make sure that if you do a debt consolidation, it has a low to zero percent. Interest rates so that you can consolidate all your debts into one account. And you can start paying off that debt much, much faster because it doesn't have this 15 to 30 percent interest rate.

So debt consolidation can be one consideration that you have. If you have a ton of debt, you're trying to get it paid down as fast as possible, but you need to watch out for those fees. It should not have a ton of fees and you need to watch out for that interest rate. Make sure that interest rate is low.

Otherwise it would not make any sense. Number two, this should be obvious, but most people don't do this. Is avoid any new debt whatsoever, especially high interest at resist the urge to take on new debts, especially for things that are luxury items, all those types of things. Too many people will be in 20, 000 with a credit card debt.

And all of a sudden they buy a brand new car. That is not a good solution for your financial situation, especially when we need to get out of that debt first, before you can hardly do this stuff. Obviously you need to do all the other stuff. You need to be budgeting. You need to be doing all that stuff to make sure you know where your dollars are going.

And then I also want you to be always, always, always reviewing those monthly expenses, seeing what you can slash down. So you can put those extra dollars towards debt. Then once you're out of debt, you have more freedom and flexibility to actually spend more on the things that you love instead of having to take all your dollars and putting them towards your debt.

And at this. Time your income should be rising at this time. So as your income starts to rise, take some of those extra dollars, get rid of this debt. So it can absolutely free you up from some other things. Now you also should be investing during this time. If you have not started investing yet, now is the time to start investing because you still have time for compound interest to start working for you.

It is not too late. If you are age 35 to 44, it is not too late to start investing. Let me say that again. If you are an older millennial. It is not too late to start investing. You need to start today. So make sure you start investing, learn how to invest. We have a course called index fund pro that will teach you exactly how to invest.

It's 99 bucks at the time recording this. So making sure that you go through those steps is a great way to learn. Teach financial literacy is the next piece. So I want you to learn how to handle your finances. And then I want you to teach your children if you have kids and pass this. Information down from generation to generation, so they don't make the mistakes that you make.

I've made mistakes in my financial life. I'm trying to make sure that my kids don't make those same exact mistakes, so I'm teaching them early. My oldest at the time recording this is five years old, and so making sure that they are aware of the mistakes that I've made is very, very important to me on teaching generational wealth.

You can give people. As much money as you ever want, but if you don't teach them how to handle that money, then it's never going to be beneficial for them. So you got to make sure as part of your generational wealth plan is that you are teaching your kids financial literacy. Now there's a bunch of different ways that you can do this.

You can do this early on by teaching them just about money and how to handle money. As they get older, you can teach them about investments and avoiding debt. So how do you teach them about investments? A number of different ways, one of which is you can open an investment account with them and you can show them, you know, different companies that you go to.

Maybe you go to Home Depot that day and you buy a share of Home Depot and say, Hey, now you are a part owner of this company. Or maybe you go to the grocery store and that grocery store has a stock ticker symbol and you buy that stock ticker symbol or a fractional share even of that grocery store. And you say, Hey, now you're a part owner of this grocery store.

And if you do this a lot, Over time, you can show them how compound interest can grow significantly over time and absolutely change their life. If they love toys, you can buy Mattel. If they love Nike, you can buy Nike. If they love Disney movies, you can buy Disney. There's so many cool examples that you can do with your kids to teach them that financial literacy.

Now, another big piece to this is if you are in debt, also making sure that you have the right insurances in place so that nothing can. So making sure that you have term life insurance. If you have people who depend on your income, making sure you have the right auto insurance, the right health insurance, all of those need to be in place so that you protect yourself because that's part of your wealth protection plan is having the right insurances.

And then if you are in debt and you are finding it hard to get by month to month, you are living paycheck to paycheck, which so many Americans are right now, and I feel your pain. I feel your struggle. Guess what? We're going to have to work on increasing our income because sometimes when you can't make it, when you can't make it past month to month, day to day, the solution to the problem, it's an income problem.

And I think for the majority of folks out there, it truly is an income problem and not a savings problem. You can only save so much. And there's only so much coming in. So sometimes we have to work on seeking advancements in our career, or maybe even building outside hustles while we build the skills to seek those advancements so that we will be able to earn more income earning is the fuel to the fire.

That's going to allow you to actually get to the next level when you build wealth. So I want you to think about that as we go through this. The next one is generation X. So generation X is ages 45 to 54. The average debt for generation X is 36, 663 credit card debt, 8, 235 auto loan debt, 18, 175 student loan debt, 34, 113.

Which is just so frustrating to have to see is that student loan debt is accelerating for these people because they're not paying down their loans fast enough and so that interest rate is just compounding against them. So people age 45 to 54 still have an average student loan debt of 34, 113 personal loan debt, 12, 586.

Now, as you start to get generation X and beyond, this is going to be so incredibly important. I cannot tell you. Is you need to have a financial protection plan and you need to be able to protect yourself against fraud because what happens is as you start to age, financial fraud becomes more prevalent because these scammers and folks that are out there are trying to target some of our older generations as well.

And so one big thing you need to do early on is protect your finances online. Because if you do not do this and some fraudster out there catches you and some fraudster out there uses your information, it is going to be the biggest headache ever to fix your credit score, to fix all these number of different things that could happen to you.

So one big thing that I did. Personally. And you've heard me talk about this a number of times because I love this service so much is I use delete me. And what delete me does is delete me takes your personal information off of the internet by contacting the data brokers out there for you that have your personal information out there.

So you can go out there and you can Google your name, for example, or your address in quotations, and you'll see your name come up and your phone number and everything. All over the place, but by taking this information off of the internet, it's going to reduce your risk liability, uh, being taken advantage of by fraudsters out there.

So I loved this service so much that we decided to partner with delete me and I got you 20 percent off with this partnership. So if you go to join, delete me. com slash PFP, and you use that promo code PFP, you'll be able to save 20 percent off your delete me subscription. So if you go check it out now, it's joined, delete me.

com slash PFP. And you can use that promo code PFP for 20%. And I truly believe making sure that you have this wealth protection plan and you have a plan in place in order to reduce your risk to financial fraud is going to be really, really important, especially as technology advances over the next couple of years.

So you got to make sure that you have this in place. Some other things that you need to do. Is if you're in this range, you also need to maximize retirement contributions. So retirement is coming up for you. You need to start contributing more money to retirement. You need to ensure that you are maximizing those retirement contributions.

So the order I like is to get your employer match. If you are working with an employer that has a 401k or a 403b, 457 TSP, all those different things. Make sure you get that employer match. I like the Roth IRA in the HSA, then going back to that pretext, that 401k and all those other ones after that. So looking at those retirement contributions, making sure you're increasing the amount that you have for those contributions.

Now, if you're at the age where your kids are out of the house or you have a smaller family situation, then maybe even considering downsizing and taking those profits and putting them towards your retirement would be a great option. If you do not need all the space that you have anymore, you've owned the house for a long time.

Maybe you have some equity in there, taking that equity and putting it towards investments would be an awesome option. Maybe you've always wanted to live in a condo on the beach, or you've always wanted to do something along those lines while being able to do that and taking some of that profit and putting towards investments would be an awesome idea.

Avoid co signing loans. So what I don't want you to do is start to co sign loans for your. Kids were starting to grow up or be grownups because this puts you at liability for the long term. Also, you want to be planning for elderly care. So when you plan for elderly care, consider long term care insurance and or have savings plans for potential elderly care, meaning that what's going to happen to you as you age and maybe you're not able to take care of yourself.

This is a good time to start planning for that now. And then avoid new large purchases. I want you to avoid new large purchases as much as you possibly can and focus paying off that existing debt instead of taking on new debt. I also like once you hit retirement age, I want to see you mortgage free because having no mortgage is going to be really important and imperative to reduce your risk liability in retirement.

If you have a mortgage and you have to be paying that mortgage all the time, I've seen way too many people in retirement who are not earning an income. And then all of a sudden one portion of their income maybe gets shut off in some way, shape, or another. And they can't afford the mortgage anymore. It is one of the worst things that can happen.

So making sure that you either get that paid off or you have your housing situation solved by the time you get to retirement age is really, really important. And also making sure that you're continuously educating younger generations in your family, teaching them about financial independence is going to be really, really, really important.

So making sure you were going through that as well. Now let's jump over. To the baby boomers. All right, next we have baby boomers and baby boomers have an average debt of 28, 384. They have credit card debt in 6, 800. The auto loan debt is 16, 623. Student loan debt is 22, 561 and personal loan debt is 12, 490.

So most folks who are baby boomers are nearing or in retirement right now. And their primary debts are credit card, auto loans, and primary medical bills are another big one that a lot of folks are trying to work with now. So one thing I would do is if you are a baby boomer, making sure that you get out of debt as fast as you possibly can is going to be imperative because I don't really want you in debt in retirement, especially when it comes to these personal loans and this credit card debt, you really need to get rid of that stuff and make sure that that stuff is.

Off of your books before you reach retirement age, it's imperative that you do this. Now, as you start to go through this, I want you to also, while you're in this age range, be reassessing your retirement plans. Make sure your retirement savings can cover your debts and living expenses. So make sure you have enough money invested in that account so that you can at least withdraw.

4 percent every year to cover your living expenses. I would also like you to have your home paid off. And in addition, looking at something like having long term emergency funds. So not just the typical six months emergency fund, but also having an emergency fund that can last one, two, three years in cash is going to be really, really helpful for you as you start to approach this retirement age.

Now, when it comes to credit cards, if you're in credit card debt, I would either eliminate using credit cards for the time being until you get out of debt or use them sparingly and pay the additional balances off every single week when you're going through that. If you're in credit card debt. Also, you need to be focusing significantly on your health.

Every age generation here should be focusing on health because health is wealth. But once you hit baby boomer age, Your health care costs are going to rise. That's just the reality of aging over time. So you have to make sure that you are staying healthy, focusing on health and wellness to reduce those medical bills is going to be really, really imperative for you.

There's a number of different things out there that you can do to stay healthy and includes nutrition and exercise. Obviously, those are the two major things. So finding a way to have a healthy diet and fitting exercise in every single day. Is going to significantly reduce your risk to disease and everything else that can come up as you start to age.

Now, also one cool thing about aging is that you get senior citizen discounts. So seek out those discounts. Every dollar matters when it comes to this, take those extra dollars. When you save that money and put them towards your debt, if you have debt so that you can start paying that down. And if you need to work a year or two longer to make sure that you are debt free, I would consider that because it de risks your entire financial situation by having no debt.

So say for example, maybe you can be retired based on your retirement account, but you have an extra 50, 000 left on the house. You work an additional year longer, all of a sudden that whole thing is paid off with your earnings that you had for that year. You'll be so much less stressed over that timeframe.

And then obviously avoid these financial scams that keep coming up. They are really, really prevalent for the baby boomer generation and on. So making sure you have that financial protection plan in place. If you don't know anything about having a financial protection plan, we have multiple episodes talking about this.

So making sure that you have that in place is going to be really, really important. We'll link up some of them down below. Now the last two generations are the silent generation and. 70 years and older. We're going to lump these two together because I'm going to have the same tips for both these generations.

And this is the reality is a lot of folks within these age ranges do have debt. And it's a very sad thing because getting rid of this debt is going to be really, really important for most people. So the average debt out there for the silent generation is 20, 643. So those are folks aged 65 to 69 and 70 years and older.

The average debt is 9, 827. So for credit card debt, it is 56. 38 for silent generation. Auto loan debt is 15, 478. Student loan debt is 12, 863. I mean, people age 65 to 69 are still carrying student loan debt and then personal loan debt, 12, 626. So the tips for both these generations is to live within your means.

So you need to adjust your lifestyle to figure out what it's going to be on a fixed income. You're going to have a fixed income coming in, either drawing down the 4 percent rule and or pairing that with social security, you need to live within your means. You also need to have a strategy in place to reduce your tax liability in retirement.

Meaning that if your tax liability is high and it's eating into your social security earnings, for example, you need to get with a CPA or a tax strategist to help you reduce that tax liability so that you can take those extra dollars, get rid of this debt as fast as possible. You need to make sure you're staying informed on changes to social security and Medicare because you're utilizing both of those tools most likely.

And so you have to make sure that you are informed with that and have plans in place to make adjustments. Then avoiding any new debt, you should not be taking on any debt when you're in retirement like this, because you got to make sure that you were avoiding that debt specifically when it comes to taking on a bunch of new personal loans or taking on credit card debt.

I want you to avoid that like the plague. I want you to. Also review your estate planning stuff. So your estate plan should be in place. If it's not, you can use a tool like trust and will, for example, as a tool that I love that I use and trust and will, you can actually set up your estate plan online. So that's a great place to go, or you can use an attorney or something else, whatever you're most comfortable with.

And then obviously still continuing to prioritize your health is going to be imperative. When it comes to this, check out silver sneakers, for example, there's a bunch of different great options out there that will allow you to have gym memberships for free. And so I love those options for a lot of folks out there who are in these two generations to make sure that they can maintain their health.

Now, all of this stuff is imperative for you to look at, especially when you're trying to get out of debt, but avoiding debt is the number one way to continue to build wealth, especially high interest. Ted, I have no problem with you. With low interest debt that are going to help you build wealth, but high interest debt, avoiding it like the plague is going to be the most important thing that you can do.

Listen, I hope you guys enjoyed this episode. I hope you learned a ton. If you guys have any questions, make sure to reach out and don't forget to check out the master money newsletter, because what we do is if you sign up for the master money newsletter. We send you a prompt immediately where you can ask me any question.

And I take those questions and those are the ones I'm prioritizing for the show for money Q and a's. So if you want to get on a money Q and a, send me something through that master money newsletter, you can check it out, linked up down below, and you can learn how to build wealth in five minutes or less per week.

Thank you guys again for listening to this episode. I truly appreciate each and every single one of you, and we will see you on the next episode.

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