Outstanding consumer debt in the U.S. is currently around $14.88 trillion, representing an average individual debt of nearly $93,000, according to data from an Experian consumer debt study.
And for millennials specifically, who range in age from 25 to 40, that number is almost as high: Millennials owe an average of $87,448.
Experian analyzed its database of credit report information to measure the average credit card debt, student loan debt, auto loan debt and personal loan debt for millennials who hold each type of debt. Here's a look at each:
- Average credit card debt: $4,322
- Average student loan debt: $38,877
- Average auto loan debt: $19,011
- Average personal loan debt: $12,306
The generation had the second-highest debt growth of any generation, trailing only young Gen Zers whose debt growth "seemed to track with age," according to Experian. Millennials' average debt grew 11.5% between 2019 and 2020, while Gen Z's grew 67.2%.
With many members of this generation becoming both parents and homeowners for the first time, millennials have the smallest amount of leeway "when it comes to financial planning and debt," says Shari Grego Reiches, a wealth manager and behavioral finance expert.
"You really have to be careful when you buy that first home that you'll be able to pay off your mortgage even with child-care expenses," she tells CNBC Make It. "If you buy a home when you're 30 or 32 and you [plan to] have your first kid at 34, make sure you factor all that in."
While most millennials aren't likely to be sending kids off to college yet, it's important for them to focus on taking care of their own debt burdens before worrying about their kids', warns Bankrate's chief financial analyst Greg McBride.
"You have to avoid taking on more debt to finance your children's education," he says. "Your kids can get financial aid for their education. You can't get financial aid for retirement."
When it comes to paying off debt, there's no one-size-fits-all strategy. One of the most-recommended paths is called the "snowball method." This strategy has borrowers pay off their smallest debts first and work their way up to their biggest balances.
In 2016, researchers for the Harvard Business Review found that the snowball method actually proved to be the most effective strategy because of its motivating qualities.
"For some people, it makes more sense to have the reinforcement of getting some debts paid off," McBride says. "It might put some wind in your sails and keep you focused."