53% of Gen Z see high cost of living as a barrier to financial success. They're 'buckling down,' expert says (2024)

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53% of Gen Z see high cost of living as a barrier to financial success. They're 'buckling down,' expert says? ›

Gen Zers are cutting back on spending. More than half, 53%, say a high cost of living is a barrier to their financial success, according to a new survey from Bank America. Nearly 3 in 4 young adults surveyed, 73%, have changed their spending habits amid record-high inflation.

“Gen Z consumers have seen their finances significantly impacted by the pandemic and its aftermath, even more so than the challenges faced by millennials as a result of the Global Financial Crisis,” Michele Raneri, vice president and head of U.S. research and consulting at TransUnion concluded.

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.

The rising debt load largely reflects a surge in prices for food and shelter at the start of their careers, coupled with a larger percentage of Gen Z who graduated with student loans.

Major Spending Categories For Gen Z

Gen Z spending habits show they care the most about fashion, makeup and beauty products, technology, and their pets.

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.

Plus, COVID-19 isn't entirely to blame for management's struggle with Gen Z: As Resume Genius's survey suggests, workers get easier to manage with age. While 45% of those surveyed described Gen Z as the most challenging to work with, this dropped to 26% for millennials, 13% for Gen X, and 9% for baby boomers.

Millennials stand to become the richest generation in history, after $90 trillion wealth transfer. Millennials are set to inherit as much as $90 trillion in assets before 2044, a new report shows.

They Are Pragmatic and Financially Minded

Financial mindedness is another core characteristic of Generation Z. Many Gen Zers grew up watching their parents take huge financial hits during the Great Recession. Having witnessed their parents' struggles, this generation is driven by pragmatism and security.

Maman believes that money is not talked about enough in households. “A lot of parents tend to struggle with talking about money/finance with their teens, as they don't entirely know where to begin, and what the exact curriculum looks like,” he says.

What generation put us in most debt? ›

Young people are more likely to have student loan balances: 24.3% of millennials and 20.2% of Gen Z are in student debt, compared to 14.9% of Gen X, 6.1% of boomers and only 1.4% of the silent generation. But among those who have student loan debt, Gen X owes the most, on average.

Depending on the socioeconomic situation, some Gen Zers encounter issue-specific stress such as fears tied to housing instability, food availability and nutrition as well as debt. Academics also top the list with 61% of teens feeling the pressure to achieve good grades which leads to getting into a college of choice.

Through a compilation of Gen Z interviews and studies from Bain & Co, CFA Institute, EY, and others, the article concludes that the youngest generation in the workforce is motivated by competitive compensation and quick career growth, and is quick to move on to other opportunities if they don't get that.

Gen Zers feel "financially vulnerable," per the report, with economic circ*mstances forcing many to live paycheck to paycheck. Less than one-third of the generation said they are in good financial condition. US inflation rates are double what they were 10 years ago, according to the Bureau of Labor Statistics.

More than half of Gen Z and millennials have less than $500 in their checking accounts. See how you stack up. More than half of Gen Z and millennials have less than $500 in their checking accounts.

Scrilla: Sometimes spelled “skrilla,” slang for cash or currency. Cheese: Similar to cheddar, refers to money as a means of survival. Guap: Especially popular among Gen Z and Gen Alpha, it's pronounced 'gwop' and it means a ridiculous amount of money, similar to “rack” or “milli.”

Gen Z is more willing than any other generation to pay 50% or 100% more for sustainable products (CGS) While 35% of all consumers said they'd be willing to spend 25% more than the original price for a product that is sustainable, Gen Z were the most willing to spend big money to ensure they were being eco-friendly.

The poll, commissioned by the National True Cost of Living Coalition and published last week, found that 65% of Americans considered "middle class" – or those earning above 200% of the federal poverty level – are facing financial hardship. That's about $62,300 for a family of four, according to FOX Business.

Globally, Gen Z'ers identified economic stability, job opportunities and quality education as their top public policy priorities. When it comes to their career expectations, Gen Z seeks a stable career, competitive salary and benefits and work-life balance.