Young Women Are Quietly Living With Debt And Are Looking For Answers

“I’m not a stupid person,” says Hannah (who doesn’t want to share her surname), 25, from Buckinghamshire, UK, who is in the process of clearing £6,500 debt, amassed over three years — currently, she has about £2,000 left to pay off. She feels that if she can get into debt, as someone that works full time and doesn’t have any dependents, anyone can make the same choices and find themselves in her shoes. “I have two credit cards, a consolidation loan [one new loan to pay off several existing debts], and PayPal credit. It’s all consumer debt, like clothes, makeup and days out. I don’t have a car, a house or a child, so I feel like there’s nothing to show for it.”

Hannah isn’t alone. This month, Citizens Advice shared that the number of young people seeking financial advice in the UK has doubled since 2019. In 2023, the charity supported 66,000 people under 25, and 20% of these people were seeking advice around debt. Financial inexperience among Gen Z is ruining credit scores and leaving them owing thousands before they’ve even had a chance to build up savings. Rosi Avis, who’s based in the Manchester, UK branch of Citizens Advice, has seen a “surge” in young people across the country coming forward for guidance. “Young people are really feeling the pinch, and sometimes they don’t know where to turn,” Avis says.

Young people can find themselves turning to credit cards, especially in times of high inflation and cost of living, to help finance their lives. Hannah got a credit card in the first place as she “wanted some extra money” and thought it would help her build up good credit. “I didn’t really think about the implications. I thought I’d pay the minimum back, but then you’re paying that minimum back for years,” she says. “It probably sounds silly and naive, but I’m not somebody who buys expensive things like designer items, so it was easy to lose track of.” After discussing the possibility of having children with her partner and saving for a home, she decided it was time to fix her financial situation, and was horrified by how much she owed altogether. “I buried my head in the sand and pretended that it wasn’t there. When I sat down with my partner and totalled the money, honestly, it was the most gut-wrenching feeling.” Hannah felt embarrassed, which is the most common reason young people don’t speak about money with confidence, as found by Citizens Advice. She also struggled with guilt and feeling anxious. “I can’t imagine how I’m going to feel when that final payment is made,” she adds.

To help with the repayments, Hannah was able to turn to her parents who loaned her £2,000 without interest, to pay off the debt with the highest interest rates first. She is still paying her parents back, and knows she’s “fortunate” they were able to step in — this won’t be an option for everyone. In terms of where else she’s gone for support, TikTok has been a source of comfort. A large community of young women on the app are sharing their “debt free journey”, a term that has over 78.5k posts. Hannah found hearing from real people helpful. “Seeing young people in a similar situation to what I’m in and how they spoke about different methods of conquering debt, made me feel like ‘Okay cool, these people seem to know what they’re doing so maybe I’ll tackle it that way too.’ I came across the snowball method [where you pay off small debts to build up momentum] and the avalanche method [paying off things with the highest interest first].” 

If there’s a generational willingness among Gen Z to be more open about previously taboo subjects, TikTok appears to be the avenue in which to broadcast that. Angela Szot, 31, from Atlanta, Georgia, is one of these TikTokkers. She began getting into debt in her mid 20s due to two car loans (one car “died”, and she had to replace it), credit card debt and medical debt after a fall. So far, she’s paid £25.2k off in 14 months, and has £5k left. “I don’t think money education exists for young people unless they themselves are looking for it, which is so scary,” she tells Refinery29. “I’m 31 and just learned about interest a year ago. I’m so proud of myself for how much I’ve accomplished this year by myself, but I have so few people in my life that anytime I would tell someone about a new accomplishment, I wasn’t getting much of a reaction. That’s when I decided to start posting videos.” For someone like Hannah, finding people like Szot online can be vital. Pearl Akintola, consumer finance expert at Experian, believes TikTok has a rightful place in helping people learn budgeting tips and “normalise the conversation” around debt, but that people must “always double check information users have posted, and to remember that what works for one person won’t work for everyone — money management has to be tailored to your own circumstances.” 

Credit cards aren’t all bad news. Not having one can limit the possibility of making big financial decisions in the future, such as getting a mortgage. Priya Malani, financial expert, previously told Refinery29: “Credit really boils down to trust. When you charge something on a credit card, you are making an arrangement that allows you to have something now but pay for it later. When you pay off your balance in full and on time, you prove you are trustworthy as a borrower. [...] Your credit card is not your emergency fund. Your emergency fund is your emergency fund, so if you make sure to have one, you’re not dependent on credit.” Essentially, only get a credit card if you know you’re in a position to pay off each month what you’ve spent to avoid accumulating interest, and accidentally getting into debt. Research from debit card company Build My Credit Score found 57% of the 18 to 34 year olds polled were nervous about taking out more credit given the cost of living crisis, and 51% actively don’t want a credit card despite wanting to better their credit score. Being realistic about your finances is key when it comes to credit cards.

While some people in their 20s are scared of getting a credit card as that research suggests, others are using them without caution — usually due to a lack of education around money management. “For many young people, receiving their first overdraft or credit card can be exciting as it provides access to funds that weren’t previously available to them,” Akintola says. “For those who have just moved away from home and are experiencing newfound financial freedom, it can be difficult for them to know how to manage money and borrow well.” Courtney (who doesn’t want to share her surname), 31, from Newcastle-upon-Tyne, knows this all too well. She now raises awareness with debt charity StepChange, after recovering from debt totalling £8,000 which added up over three years from when she got her first credit card aged 18. At the time, she was “ashamed and didn’t tell anybody”. Now debt-free, she looks back and sees how “social pressure” contributed to her losing track of her expenses. “I was working on minimum wage and was constantly trying to keep up with my friends, and I hadn’t mentally prepared for the cost of moving out of my family home. Nothing really prepares you for growing up and having to manage your own finances all of a sudden. I take responsibility for the debt that I got into, but there needs to be more regulation around banks and who they offer credit to. I wonder how appropriate it is sending a letter to an 18-year-old offering such high credit limits.”

The important thing to remember is that it is possible to get out of debt. Akintola recommends creating a monthly budget, subtracting your necessary expenses to see what you’re left with, then to prioritise paying back debt with the highest interest rates. “When possible, try to make extra payments towards your debt. Even if it’s a small addition, it could help you reduce the overall amount faster,” she says. Consider debt consolidation too, she adds, which can make it easier to keep track of the debts in one place if you have several. Also, seek professional support from free debt advice services, as they can help you create a debt repayment plan. The first thing to do is to release yourself of the shame people in debt often feel and talk to someone you trust.