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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.
More from Personal Finance:
3 ways Gen Zers can build credit
Why can’t today’s young adults leave the nest?
Gen Z, millennials are 'house hacking' to become homeowners
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 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.
Does Gen Z have it harder financially? ›
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.
What are the economic issues with Gen Z? ›
On the financial front, Generation Z is dealing with challenges that either didn't exist previously or did but to a lesser degree. These include escalating costs for housing, education, and healthcare; ballooning student loan debt; and the perception of most Americans that wages are not keeping up with inflation.
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.
What stresses Gen Z the most? ›
From issues like discrimination and human rights to personal safety and violence, it's all stressful to younger Americans. But, like their older counterparts, health- and finance-related concerns topped the list of stressors.
What are Gen Zs biggest fears? ›
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.
Is life harder for Gen Z? ›
Older adults have a lot to say about Gen Z. A recent survey found that 40% of employers prefer not to hire Gen Z workers because they find them to be ill-prepared for the workforce. Another poll found Gen Z is having more difficulty achieving work milestones than their parents did.
What is negative about Gen Z? ›
Bad Social Interactions
Another negative attribute associated with Gen Z by older generations is the inability to interact in person. They don't know how to talk to someone face to face. Due to the technology constantly at their fingertips, they're used to communicating online.
Are Gen Z worried about money? ›
Gen Z is more stressed about their savings than any other age group. Here's what else they're worried about. Gen Z is more stressed than any other generation about their savings accounts, a BI survey shows. Nearly half of Gen Z adults worry about their daily spending.
Which generation has the least wealth? ›
Millennials stand to become the richest generation in history, after $90 trillion wealth transfer | CNN Business.
How many Gen Z live paycheck to paycheck? ›
As a result, 6 in 10 Gen Z consumers live paycheck to paycheck, with their pay just covering monthly expenses. This is true even as they average smaller shares of essential expenditures, such as housing and groceries. Gen Z consumers are more apt to spend their surplus on nonessential goods and services.
What are Gen Z weaknesses? ›
However, Gen Z has certain weaknesses. They have a rather indifferent attitude towards security and prioritize convenience over security . They also experience a low perceived behavioral control and lack education on how to behave securely online .
What are Gen Z lifestyle problems? ›
They also experience anxiety rooted in the presence of global crises and prioritize time with friends and family to cope with their anxiety. They are also greatly concerned about social media, with 1 in 4 Zoomers saying that they cut back the time they spend on social media to help cope with their anxiety.
What has Gen Z had the most challenges facing them in their lifetime? ›
Economic Security
Multiple studies have reported that personal finances, jobs, debt, the cost of living and housing insecurity are major sources of stress for Gen Z.
What are frustrations of Gen Z? ›
Feel underpaid (41%) Want better work-life balance (40%) Feel burned out (35%) Want to explore other interests (35%)
