Millennials Vs. The Baby Boomers – Who Has the Better Debt

Listening to Triple J this morning, an interesting point was raised about intergenerational debt and whether the Baby Boomers or the millennials had better debt than the other.

There’s been a fair amount of fierce debate trudged up by topics like Sydney’s lockout laws and the pricey property market that us millennials just can’t seem to get a grip on.

And why wouldn’t we be mad? We’re continuously labelled as lazy, entitled and selfish by a generation who had an easy ride to the top of Wealth Mountain while we’re barely able to establish a reasonable basecamp.

But which generation is better with debt? And in particular, bad debt.

Bad debt is when credit is used to purchase something that will decrease in value, won’t earn you any money and is not tax deductible. To use an example; that ridiculously expensive pair of shoes you just put on your credit card is classified as bad debt.

Good debt on the other hand, is using credit to help you build wealth, like buying an investment property or business.

I had a look to see what I could find.

Student debt

The average Australian university graduate is carrying a debt of around $24,000, a figure that’s expected to rise in the coming years.

And the architect of the HECS loan, Bruce Chapman, had this to say about us; “if they can afford to go to Europe, they can afford to pay off what they owe taxpayers.”

And how much did the boomers have to pay? Absolutely nothing. They got to go to university for free, which makes statements like Chapman’s cut all the deeper. Why should we have to put ourselves through financial struggle to educate ourselves?

In terms of debt, this one’s a good one, as it’s an investment that’s going to help you earn more money. 


A mortgage is like the holy grail of good debt, as property is seen as a low risk investment that will likely increase in value over time.


Source: ABS

Data from the Australian Bureau of Statistics shows that the average outstanding property loan for those aged 25 – 34 was $141,600 in 2012, while those aged 55 – 65 averaged at $98,200, but a greater proportion of the latter figure was attributed to investment properties, rather than the family home.

Of course, these numbers are bound to be much larger now and should be shown in the next census.

Personal debt

Generally used for smaller purchases, personal debt (particularly credit cards) is often used as an indicator of bad debt.

The latest census figures show that average personal debt including credit card debt for those aged 25 – 34 was $8,300, while those aged 55 – 64 clocked in at $5,600.

Again, these numbers aren’t as current as we’d like them to be, but it gives you an idea of the generational trends.


So who has the better debt? Well, it’s hard to say for sure, as there aren’t a lot of current statistics that break down wealth by generation and type. The ABS stats also identify the cohorts in age brackets rather than generations, so we’re not able to see an accurate snapshot of each generation, but a rough idea.

In terms of a ballpark view, millennials look to have more good debt, even when factoring in the debt of Baby Boomer investment properties. The more important question is; is the proportion of debt that we have as a generation worse than what the Boomers were dealing with at our age?

Classic Boomers.

Given that the average home now costs 12 times our average income, I think it’s fairly safe to say that we’re dealing with the shit end of the stick.