Let’s be clear about something right up front: being a millennial and being buried in debt is not a personality flaw. It’s not because you bought too many $7 oat milk lattes or can’t stop adding neutral-toned furniture to your wishlist. No shame here. You didn’t start the fire — you were handed the lighter and told to juggle it while earning $16 an hour with a college degree and two side hustles.
So when people say “Debt-Free Millennials” like it’s some mystical unicorn tribe thriving on smoothies and passive income, it can feel… irritating. Because for a lot of folks in their 20s, 30s, even early 40s, ‘living debt-free’ doesn’t feel remotely realistic. But here’s the thing: it’s not about being perfect. It’s about being strategic. And maybe, just maybe, a little pissed off enough to start doing things differently.
Why Millennials Carry So Much Debt (It’s Not Just Student Loans… But Yeah, Also That)
Lemme introduce you to Casey. Smart, makes a decent income, been working solid jobs since 2013. Still paying off $48,000 in student loans. Has a car payment, a couple of grand on credit cards, and – oh yeah – spent a good chunk of her 20s covering emergencies with her PayPal credit line because her “emergency fund” was just three mismatched socks and a half-used candle.
This is what broke looks like for MANY millennials. It’s not laziness or bad spending habits — it’s the system. From flat wages to ridiculous housing prices, we’ve created a world where doing everything “right” often just means you’re broke… but with a better couch.
So Where’s It All Coming From?
- Student Loans: The average millennial with loans owes around $33,000. Some owe double that.
- Credit Cards: With costs rising and wages staying meh, many lean on plastic to cover the gaps.
- Personal Loans & BNPL: “Buy now, cry later” just hits a little differently when half your paycheck goes to Klarna.
- Medical Debt: Fun fact: 1 in 5 millennials have unpaid medical bills. A broken arm shouldn’t require a GoFundMe, but here we are.
So debt-free? Nah, you’re not failing. You’re surviving. Which brings us to the juicy part — how the heck do you actually dig out?
The Debt-Free Plan That Actually Works For Millennials
You wanna get out of debt? Cool. But first, stop trying to budget your way to freedom using a method that’s built for suburban dads in 1998. That strategy where you assign every dollar down to the penny and pretend you’ll never order DoorDash again? Yeah. That dies by Tuesday.
Instead, try this: track what you’re already doing. Like… for real. Pull your bank and credit card statements for the past 2–3 months. Get real nosy with yourself. Where’s your money actually going? That’s your baseline. Not your fantasy grocery list or your “this month I’m REALLY gonna try” plan. Your actual numbers. Build around that.
Here’s What Tends To Work Better:
- Start With Tracking, Not Budgeting: Build a plan around your real-world spending. Then tweak.
- Pay Off High-Pain Debt First: Forget the snowball vs. avalanche debate. What’s the debt that’s keeping you up at night? Start there.
- Use Tools That Actually Help: Acorns can make saving feel less painful. Betterment, Credit Karma, PayPal — pick what clicks, not what’s “trendy.”
- Plan Small Wins: Got a $700 credit card? Knock it out. That first victory builds momentum way better than motivational quotes ever will.
And please, PLEASE stop beating yourself up during slow months. Some seasons suck — and not every paycheck will be amazing. But building that muscle of awareness? That’s what gets you through.
Don’t Fear The B-Word: Bankruptcy Isn’t Failure
Okay, let’s talk about the financial Voldemort nobody wants to mention: bankruptcy. Millennials especially treat it like it’s a life-ending event. But here’s the million-dollar irony — folks who file for bankruptcy often end up in better shape than folks who keep limping along quietly, just “trying to make it work.”
Crazy, right? But research shows people who file bounce back stronger. Better credit scores. More money in savings. Less stress. Lower risk of falling back into debt.
Compare that to credit counseling — which sounds noble, but actually fails more than 75% of the time. And even the folks who “succeed”? They lose up to $400k in lost wealth over time, just by dragging the debt out instead of cutting it off.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
So yeah — bankruptcy shouldn’t be your first option. But should you fear it like it’s the IRS with a search warrant? Absolutely not. For the right cases, it’s the reset button that gets your life back on track.
Tricky Questions Millennials Ask About Debt (And What To Actually Do)
“Should I Pay Off My Student Loans Or Save First?”
If your student loan interest is low (under 5%) and you don’t have at least a few hundred in emergency savings — stash first. Use Acorns or an automatic savings plan to make it painless. You can’t pay off loans from a hospital bed you couldn’t afford to visit. Life happens. Be padded.
“What’s My Credit Score Even DOING Right Now?”
Good question. Most people have no clue until they’re about to apply for something. Use Credit Karma or your credit card’s free checker to keep tabs. And yes, pulling your own score won’t hurt it — that’s a myth that needs to die already.
“I Want To Get Out Of Debt… But Everything Costs More Now”
You’re not wrong. Thing is, your plan has to flex with reality. Prices won’t drop just because you’re feeling virtuous this month. Adjust your expectations, your cash flow — not your goals. And maybe skip the latte guilt. Your loan interest rate doesn’t care about your coffee choices.
It’s Not About Being Perfect — Just Persistent
Debt is emotional. Exhausting. Sometimes embarrassing. But you’re not alone — and you’re not broken. Whether you’re $5k down or $50k deep, there’s a path out. One step at a time. One choice at a time. One small win at a time.
Just don’t do it alone.
Subscribe to the newsletter if you want someone in your corner who’s already been neck-deep in the mud. Or check out the Get Out of Debt Guy podcast — it’s like therapy, but with less crying and more “aha” moments.
