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The death of Gen Z has been greatly overexaggerated, says NYU professor Suzy Welch
Gen Zersarehaving a harder time making ends meet, let alone building wealth.
Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a recent Bankrate report. Gen Z is generallydefinedas those born between1996 and 2012, including a cohort of teens and tweens.
In the face of a higher cost of living, 53% of Gen Z workers also said they have a side hustle — more than any other generation — to help cover their monthly expenses, Bankrate found.Fewer are saving for the future.
Parents need to realize that their kids are in trouble.
Laurence Kotlikoff
professor of economics at Boston University
"This is a tougher climate, for sure," saidLaurence Kotlikoff, economics professor at Boston University and president ofMaxiFi, which offers financial planning software. "Parents need to realize that their kids are in trouble."
Gen Zers face greater obstacles to financial success
Inflation'srecent runuphas indeed made it harder for those just starting out. More than half, or 53%, of Gen Zers say higher costs are a barrier to their financial success, according to aseparate survey from Bank of America.
In addition to soaring food andhousing expenses,millennials and Gen Z face otherfinancial challengestheir parents did not as young adults. Not only are theirwages lowerthan their parents' earnings when they were in their 20s and 30s, but they are also carrying largerstudent loan balances.
Roughly three-quarters of Gen Z Americans said today's economy makes them hesitant to set up long-term financial goals and two-thirds said they might never have enough money to retire, another recent Prosperity Index study byIntuitfound.
Young adults also have the advantage of time
"Younger Americans haven't had it easy in this economy, but any step they take toward strengthening the building blocks of their finances will pay off over time," said Sarah Foster, analyst at Bankrate.
Gen Zers have the significant advantage of those extra years when it comes to saving for long-term goals such as retirement, she added.
"Prioritize investing in yourself, paying down debt and reaping the benefits of compound interest by saving for both the short and long term," Foster advised.
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The earlier you start, the more you will benefit from compound interest, whereby the money you earn gets reinvested and earns even more.
There are no magic bullets, Matt Schulz, LendingTree's chief credit analyst, recently told CNBC — but there are a few financial habits that pay off. "Most things around saving aren't super complicated but it doesn't mean they're easy to do," he said.
"Just like having a healthy lifestyle, it's just about doing the right things over and over again over time and having patience."
FAQs
Gen Z is in the financial trenches. A new study from credit reporting agency TransUnion found those in their early 20s are earning less, have more debt and see higher delinquency rates than Millennials did at their age. The findings outline the credit usage of 22 to 24 year old Gen Zers.
Why does Gen Z have it harder? ›
She says Gen Z faces more challenges in some ways than previous generations. “There's a growth in inequality in the transition to adulthood. There's a lot of changes in culture and norms, insecurity more generally, in terms of climate change and the war and school shootings and rapid inflation.
Will Gen Z be poorer than their parents? ›
Gen Z is richer than just a few years ago—and much richer than their parents at the same age—but everything costs more and they have more debt, Pew study reveals. Gen Z is making more money than their parents at their age, but they still have to deal with higher costs of buying a home and college.
How is the economy affecting Gen Z? ›
Gen Zers are having a harder time making ends meet, let alone building wealth. Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a recent Bankrate report.
What does Gen Z struggle with the most? ›
Gen-Z feels substantial anxiety and stress about jobs, long-term financial stability and major life steps, such as buying a home and starting a family.
Will Gen Z outlive their parents? ›
Regardless of youth trends concerning sedentary lifestyles and higher calorie intake, Generation Z will on average outlive their parents, as has been the case with every Australian generation since record keeping began. "This longevity is not without its downsides.
Is Gen Z a doomed generation? ›
All this can make it hard to feel optimistic about Gen Z. But when you look around the world, and at a wider set of measures, the Zoomers are far from doomed. In many respects, they are doing rather well.
Why is Gen Z so rich? ›
“Because housing costs have soared so much, many young adults with family money get help from Mom and Dad even when they have jobs and earn a perfectly respectable income,” Redfin's chief economist Daryl Fairweather once said. So, yes, Gen Z is relatively rich compared to their parents and grandparents.
Which generation quits the most? ›
Gen Z workers also report the highest rates of wanting to quit their jobs within the last three months compared to all other generations. In addition to feeling the least engaged in work, Gen Z also finds their responsibilities uninspiring.
Which generation struggles the most financially? ›
Young members of Gen Z are struggling more financially today than Millennials did at their age 10 years ago, according to a new study published last week by the credit reporting agency TransUnion.
GenZ's fears are summed up in two words: FINANCE and FULFILLMENT. The desire to get rich early and spend time with families could cause a stigma if not fulfilled. Every GenZ has a perfect dream in their head to achieve. Many of them hope to change history, forget old memories, and build new ones.
What are the negatives of Gen Z? ›
Share:
- Gen Zers have a short attention span. ...
- Gen Zers are multitaskers. ...
- Gen Zers are addicted to technology and can't handle face-to-face interactions. ...
- Gen Zers expect too much from the brands and companies they interact with. ...
- Gen Zers want to be rewarded quickly.
Many Gen Zers are focused on staying afloat, making traditional financial milestones feel irrelevant. Over half (56%) of Gen Zers said they don't have enough savings to cover three months of expenses, per an August 2023 Bank of America survey.
Which generation is most financially responsible? ›
Baby boomers feel the most financially responsible of the generations, with 86.3% claiming financial responsibility. The numbers were lower for Generation X (74.3%), millennials (73.0%) and Generation Z (71.8%).
How Gen Z and millennials differ financially? ›
Millennials, born roughly between 1981 and 1996, are characterized by higher levels of income compared to Gen Z, born between 1997 and 2012, due to more years in the workforce. They are more focused on growing their money to secure their future.
Which generation is most in debt? ›
By most measurements, Gen X is deeper in debt than other generations. Members of Gen X — born roughly from 1965 to 1980 — have the highest average debt stemming from student loans, credit cards and more.
