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Military Millennials – A “Bucket List” to Help Manage Credit and Debt

By FINRA Investor Education Foundation Staff

Got debt? You’re not alone. Many Americans are carrying buckets of debt.

The Federal Reserve Bank of New York released a report recently that U.S. household debt—which includes home mortgages and home equity loans, credit card debt, auto loans and student debt—stood at $12.73 trillion in the first quarter of 2017. That’s a staggering amount, and surpasses the previous record set during the 2008 recession.

The Fed also reported that 44 million Americans share a piece of over 1.34 trillion dollars’ worth of student loan debt. The majority of student debt holders are now over 30 years old. Some are millennials, dragging their bucket of student debt well after their schooldays are over.

These statistics don’t tell the entire story, though. Americans’ ability to manage their buckets of debt has actually improved since 2008. Last quarter, the percentage of borrowers who were “seriously delinquent”—meaning payments are 90-days or longer overdue—stood at 3.4 percent, compared to 8.7 percent at the post-recession peak. That’s partly because lending, especially mortgage lending, has gotten tighter. For example, 61 percent of new mortgages in that same quarter went to borrowers with a credit score of 760 or higher. Only about a third of Americans have a score that high.

So, what does this have to do with you? You could take it as a nudge to improve how you manage your credit and debt. There’s no better way to kick your debt bucket than taking these steps. You could call them your debt “bucket list.”  

1. Request a credit report from all three credit reporting bureaus; provides one-stop shopping. Clean up any reporting errors you catch.

2. Obtain your credit score. Service members and their spouses can do this by taking the Military Saves pledge. It’s easy and the cost is free to you. Your FICO score and analysis tool will be delivered to your .MIL email address.

3. Set up an emergency fund at a bank or credit union. Tap this rainy day fund the next time you encounter an unexpected car repair bill or trip home. You won’t earn much interest on this account, but it may keep you from adding high-interest credit card debt to your load. 

4. Shop around for credit products. Ask your auto lender or credit card provider if you qualify for a lower rate. Don’t settle for their first offer; lenders need to know that you’re serious enough to take your business elsewhere. Wrangle with them to get your interest rate lowered to the bare minimum. Consider consolidating student loans, if practical, under the lowest interest rate available.

5. Pay down existing debt. In the low-interest rate environment we live in today, paying off debt, especially high-interest rate debt, which may include auto loans and credit cards, can “earn” a higher rate of return than you might command through saving and investing. Pay off the debt with the highest interest rate first. If you are having trouble paying off a loan, call your lender to see whether you can renegotiate the payment terms—or connect with your installation’s Personal Financial Management Office for guidance. Once that debt is paid off, work on the next-highest rate debt. Over the long haul, this method keeps more money in your pocket.

6. Don’t ignore saving and investing all together. Now is the time to start or add to your retirement savings. Millennials have time on their side, so put the time value of money to work for you. Investing now in your “future self” will pay big dividends down the road. Participating in the Thrift Savings Plan, or another employer-sponsored plan, is a great way to save for retirement. You may appreciate the break you receive when you realize that TSP contributions can lower your taxable income.  

Millennials have the power to provide for their financial future as they shape America’s future. Strike credit and debt worries from your “bucket list,” and retire your debt bucket for good.

For more information about managing everyday finances, visit

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