The state in which you reside doesn’t dictate your spending habits, but there are other social and geographical variables that do. Cost of living is one of these. Average income is another. With so many young Americans in debt right now, we took some time to review these factors and how they relate to the states with the least amount of millennial debt.
Before we begin, we need to clarify the meaning of the term “millennial.” For years, the word has been tossed around as a descriptor for the youngest members of our society. In truth, a millennial is anyone born between 1977 and 1995. That makes the oldest in the group somewhere in their mid-forties and the youngest pushing thirty in a few years.
Millennials are the largest living adult generation in the United States, surpassing baby boomers in 2019. They spent $1.4 trillion in 2020, while a pandemic was raging. Those numbers will go up this year, and so will their debt. To understand this better, here’s the list of five states that currently have the least millennial debt and the reasons why.
The average millennial debt in Mississippi is $74,300 and the average FICO score is 644. The numbers are related. High poverty levels and low income for those who are working in the state mean that credit is harder to come by. In this case, lower debt is not a good thing. It’s sign of a state that’s struggling economically. The unemployment rate is 4.5%.
2. New York
New York is on the opposite end of the wage scale. The median household income is over $68,000 and average millennial FICO score is 701. Average millennial debt comes in at $81,960. In this case, higher income levels seem to offset the ability to get credit. Education may have something to do with it too. Over 35% of New Yorkers have at least a bachelor’s degree.
3. West Virginia
West Virginia is one of the poorest states in the country, and it shows up in all the relevant statistics. Millennial debt is $82,379. Millennial FICO score average is 653. Per capita income is just above $26,000. Borrowing is difficult because lenders are looking for higher numbers in all these categories, except total debt of course.
Are you sensing a theme here? States in the southeast portion of the U.S. rely heavily on the petroleum and agricultural industries. Neither has done well in recent years. Alabama has an average millennial debt of $83,121 and an average FICO score of 653. The per capita income is slightly higher than West Virginia, coming in at $28,650.
Sweeping our tour of the deep south, Arkansas is home to the very first Walmart. That’s been helpful to the population because their per capita income is just $26,577. The total millennial average debt is $83,394 and average FICO score is 658. On the flip side of that, the cost of living is low, with median home costs of $145,300. That’s a subject for another day though.