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.
The study includes a survey conducted in February of 614 Gen Z consumers, aged 22-24, and 623 Millennials, who were 22-24 years old 10 years ago. It includes an assessment of credit bureau data from December 2023 of Gen Z consumers who are 22-24-year-olds, and it includes data from December 2013 of Millennial consumers who were 22-24 years old at the time. The study also includes interviews with Gen Z adults in February-March 2024.
The study shows that even as cost of living increases, especially amid high inflation, 22-24-year-olds today have lower income and higher debt-to-income ratios than 22-24-year-olds ten years ago.
Today, 22-24-year-olds are making an average of $45,493, according to the Q4 data from 2023. But, adjusted for inflation, 22-24-year-olds ten years ago were making $51,852, according to the Q4 data from 2013.
The debt-to-income ratio is also higher today than in 2013 – 16.05 percent compared to 11.76 percent.
The study indicates that higher balances today “reflect higher inflationary pressures on Gen Z,” according to the report. The average credit card balance for 22-24-year-olds today is $2,834, but ten years ago, it was $2,248.
In the survey, Gen Z 22-24-year-olds report being more stressed out about their financial situation than Millennials who were 22-24-year-olds ten years ago. Asked how confident or stressed out they feel about their financial situation, 14 percent of Gen Z respondents say they are “extremely stressed out,” compared to 8 percent of Millennial respondents who say the same, when describing how they felt ten years ago.
Similarly, only 8 percent say they’re “extremely confident” among Gen Z respondents, compared to 13 percent of Millennials who say they were “extremely confident” ten years ago about their financial situation.
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FAQs
The average credit card balance for 22-24-year-olds today is $2,834, but ten years ago, it was $2,248. In the survey, Gen Z 22-24-year-olds report being more stressed out about their financial situation than Millennials who were 22-24-year-olds ten years ago.
Are Gen Z struggling financially? ›
Over half (57%) of respondents do not have enough emergency savings to cover three months of expenses. Nearly one-third (30%) feel they don't make enough money to save. Only 15% of Gen Z put a set percentage of their paycheck into a savings account each month.
How Gen Z and millennials differ financially? ›
Key Findings. Gen Z is spending more than millennials on housing and insurance. Gen Z has more debt than millennials did, even after accounting for inflation and higher incomes. Roughly 1 in 7 Gen Zers are maxed out on their credit cards, more than any other generation.
Why are so many millennials struggling financially? ›
Some reasons that Millennials have difficulty saving include extremely high rents in the U.S., high student debt, experiencing a financial crisis and health pandemic during their careers, high inflation, and increasing housing demand.
What are the main challenges that Generation Z will face as they grow older and come of age? ›
Gen Zers dream of personal career fulfillment but expect economic struggles. They have less positive life outlooks, with lower levels of emotional and social well-being than older generations.
Why is Gen Z struggling so much? ›
The state of the world also fuels Gen Z's pessimism. An ongoing study at Montclair State University finds that Gen Zers perceive the world as more dangerous than their older counterparts. They're more likely to feel anxiety about extreme weather. Active-shooter drills became the norm while they were in school.
Does Gen Z spend more than millennials? ›
Compared to Gen Z, millennials typically spend more money, which comes to no surprise, since they are older, more likely to be employed, and typically less reliant on their parents or guardians.
Why is Gen Z giving up? ›
They struggle with comparing themselves to others on social media, they're regularly exposed to negative news, and they're living paycheck to paycheck. Even though Gen Z might think that the future will be a disaster, it is important to remember that everything gets better eventually.
What is the difference between Gen Z and Millennials? ›
A Millennial is anyone born between 1980 and 1995. In the U.S., there are roughly 80 million Millennials. A member of Gen Z is anyone born between 1996 and the early-mid 2000s (end date can vary depending on source). In the U.S., there are approximately 90 million members of Gen Z, or “Gen Zers.”
What is Gen Z's biggest issue? ›
Gen Z Struggles With Mental Health
According to McKinsey, over half (55%) of Gen Zers report having either been diagnosed or receiving treatment for a mental health condition, compared to 31% of people aged 55 to 64, who have had decades longer to seek and get treatment.
Stress isn't the only trigger for Gen Z believing they are “aging like milk” (another highly searched query). Some in the cohort claim their use of retinoids is speeding up premature aging, with social media testimonials citing that it is creating an increase in fine lines.
What are the negatives of Gen Z? ›
Lack of financial literacy: Despite their technological prowess, many Gen Z employees may lack essential financial literacy skills, such as budgeting and investing, which can impact their ability to manage their finances effectively and plan for the future.
What percentage of Gen Z is in debt? ›
About 17 percent of Gen Zers have personal loan debt, a higher share than in any other generation, with young adults living in the nation's 100 largest metropolitan areas owing a median amount of $1,743 in this type of debt.
What percent of Gen Z is financially literate? ›
Financial literacy is the ability to understand and use financial concepts, including topics like budgeting, saving, investing, and credit. According to a Financial Industry Regulatory Authority (FINRA) survey, only 24% of Gen Z respondents could correctly answer four out of five financial literacy questions.
Why are so many people struggling financially? ›
Job openings remain high, and the unemployment rate has held below 4% for more than two years straight. But Americans are also grappling with the highest interest rates in two decades and chronically high inflation that has made the cost of everyday necessities like groceries, rent and gasoline far more expensive.
How Gen Z thinks about money? ›
The gamification of personal finance
Take the "girl math" phenomenon of 2023 or Gen Z's unfortunate label as the "buy everything, own nothing" generation; in all cases, the message seems to be: money isn't real.
