The Struggle is Real: Gen Z Faces a Tough Road to Adulthood
For many members of Generation Z, the vision of adulthood they grew up imagining—a stable career, homeownership, and starting a family—feels increasingly out of reach. Born between 1997 and 2012, Gen Zers are grappling with unprecedented financial challenges, from soaring living costs to crippling student debt. This generation is deeply concerned about whether they can achieve the lives they envision. Rising costs of living, tuition fees, and an unstable job market have made milestones like homeownership, financial independence, and career stability seem more unattainable than ever before. As a result, many young people are racking up debt and delaying major life decisions, such as buying a home or having kids.
The Burden of Debt: A Weight That’s Hard to Shake
Gen Z is facing a debt crisis that’s more severe than previous generations. Data from TransUnion shows that Gen Zers have approximately 30% more credit card debt than millennials did at the same age, even after accounting for inflation. They are also the most likely generation to max out their credit cards and fall behind on payments, according to the New York Fed. This debt is having long-term implications on their ability to achieve financial milestones. A survey conducted by Laurel Road in partnership with Luminary found that 79% of respondents with student loans struggled to save for emergencies or retirement, 75% couldn’t invest, 52% couldn’t afford to buy a home, and 35% were delaying having children. The uncertainty of repaying student loans is a significant factor in these struggles.
Locked Out: The Growing Gap in Homeownership
Owning a home—a cornerstone of the “American Dream”—feels painfully out of reach for many young Americans. Census data shows that homeownership rates have dropped from almost 44% in 2004 to 37% in recent years, while the percentage of adult children aged 25 to 34 still living at home has climbed from under 11% in the early 2000s to 16% in 2023. This trend is partly due to record-high home prices and surging mortgage rates. The consequences of slower generational progress are profound. Delayed homeownership means missing out on a reliable wealth-building strategy and the ability to contribute to overall economic demand. Additionally, financial constraints are forcing many young people to delay or forgo starting families, which can have broader societal impacts, including slower population and economic growth.
Family Matters: The High Cost of Raising Kids
Having children comes with a hefty price tag, from daycare and college funds to family vacations and everyday living expenses. Many young people are worried about whether they can afford to raise a family. A 2023 Pew Research Center survey found that among childless adults under 50 who said they were unlikely to ever have kids, 36% cited the inability to afford raising them as a major reason. These concerns are exacerbated by the high cost of living and uncertain job market. Researchers have found that young people are deeply worried about whether they will earn enough to support a family, highlighting the financial pressures that are reshaping their life choices.
Modern Temptations: Digital Spending and Social Pressure
In today’s digital age, it’s easier than ever to spend money impulsively. Social media platforms like Instagram and TikTok serve as virtual shopping malls, while influencers promote lavish lifestyles that encourage consumers to keep up. Digital payment services like Apple Pay and Afterpay make buying things quick and effortless. Personal finance expert Keisha Blair notes that the convenience of digital payments and the constant exposure to aspirational lifestyles on social media are fostering a culture of instant gratification and heightened consumerism. This trend is making it harder for Gen Zers to stick to budgets and avoid debt. The temptation to overspend can also harm their credit scores, making it harder to secure loans for cars or homes in the future.
How to Achieve Your Dreams: Taking Control of Your Financial Future
While the odds may seem stacked against them, there are concrete steps young people can take to achieve their goals. Rod Griffin, Experian’s senior director of consumer education and advocacy, recommends drawing up and sticking to a budget, setting achievable goals, and cutting back on impulse purchases. Seeking professional guidance and eliminating “sneaky expenses” like subscription fees can also make a difference. Additionally, Gen Zers don’t have to follow the same milestones as past generations. Elizabeth Husserl, author of “The Power of Enough,” suggests redefining wealth on their own terms, whether that means buying a house with a friend, pursuing alternative education, or prioritizing side hustles that align with personal values. By focusing on what truly matters to them, young people can create a more meaningful and fulfilling life, even in the face of financial challenges.
In conclusion, while Gen Z faces significant obstacles, there is hope. By being intentional with their finances, redefining success, and embracing flexibility, young people can chart their own paths and build the lives they want, even if they look different from what previous generations envisioned.
