New York, NY—An important new research report called “LIVING WITH DEBT: A Life Stage Analysis of Changing Attitudes and Behaviors” was released today at a press conference in New York City. The author of the report is Robert D. Manning, Ph.D., economist and professor of finance at Rochester Institute of Technology, and author of
Credit Card Nation. Manning is a specialist in consumer finance, socio-economic trends and retail banking deregulation, and has testified before Congress on the use of credit.
The report, which was commissioned by Lending Tree, examines how attitudes and behaviors related to consumer debt have changed between generations, and also how these attitudes and behaviors progress throughout the various stages of adult life. In recognizing financial pressures and debt triggers occurring within certain groups, the study examines:
- College Students
- Young Singles
- Young Families
- Mature Families
- Empty Nesters
- Seniors
The full report, as well as the executive summary of highlights, can be downloaded at www.lendingtree.com/livingwithdebt
Research Highlights
Overall, the study underscores several universal themes that appear consistently across life stages:
Living with increasingly higher levels of debt has become an accepted and normal state of affairs – considered an inevitable and likely permanent feature of everyday life. The social stigma of high levels of debt is largely gone.
Many people attribute their willingness to go into debt—or to take on additional levels of debt—directly to a dramatic increase in spending on children and grandchildren. Even older life stage groups, who more typically adhere to the “traditional” financial values of thrift and frugality, report using credit much more freely when spending on what they feel are “socially expected” lifestyle activities and accessories for their kids. Consequently, as families save less for college and rely more heavily on student loans, this contributes to higher debt levels among their children, who enter young adulthood with more debt (both student and consumer) than previous generations.
Attitudes toward home ownership have changed, from simply providing necessary shelter to satisfying both a need and a tangible, secure (and considered near perfect) investment. Home ownership has become a much more important piece of the overall personal finance equation, with the real or expected appreciation in home equity often considered a financial stabilizer or “way out of trouble.”
Many participants feel ill-equipped to make prudent financial decisions, expressing an explicit desire for practical personal finance education, information and services. Long-term financial planning, with the exception of buying a house, is largely absent. Few have developed, let alone adhere to, a personal budget, although older groups were more likely than younger groups to do so.
Additional highlights for each life stage can be found in the executive summary at:
www.lendingtree.com/livingwithdebt.
Methodology
The study uses a life stage approach based on the assumption that the experiences of the different groups illuminate current and future trends related to consumption and saving/borrowing patterns. This approach helps to distinguish the unique influences of particular household dynamics, drawn from behaviors and experiences that vary across historical periods, or what is commonly referred to as “cohort effects.” Therefore, each life stage group is specified as a methodologically and sociologically discrete category; two focus groups comprised of randomly-selected members of each of the six specified life stage groups were conducted on consecutive days over the summer of 2005 in three distinctly different geographic regions: Rochester, NY; Washington, D.C.; and Orlando, FL.
More information about the study’s methodology can be found at: www.lendingtree.com/livingwithdebt.
Lending Tree Media Contact:
Gil Isenstein, Mullen PR; 987-468-1155; gilisenstein@mullen.com