The State of Gen Z Financial Health (2024)

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The State of Gen Z Financial Health? ›

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.

Gen Z is reshaping global financial attitudes with unique perspectives and innovative terminologies. In China, Gen Z balances indulgence with prudence, embracing both the "Dopamine Economy" for instant gratification and "Reverse Consumption" for mindful spending and saving habits.

Nearly One-Third of Gen Z Reports Being Unable To Save

30% said that while they would like to save, they don't earn enough money to do so. Some are living paycheck to paycheck, with 24% of Gen Zers reporting that their income is usually only enough to cover necessities.

A new report released last week by the Bank of America's Better Money Habits financial education team found that 46% of Gen Zers between the ages of 18 and 27 rely on financial assistance from their parents and family.

The top sources of financial advice for Gen Zers are relatives and friends, social media, and financial advisors.

Gen Z continue to struggle with building savings and contributing to their retirement. 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.

Gen Z Struggles With Mental Health

Social media, which many Gen Zers have used for most of their teenage and adult life, exacerbates these issues — no other generation has had such immediate and unfiltered access to the news for most of their lives, which can lead to stress, anxiety, and other mental health issues.

Gen Z's outlook on retirement

Over a third (35 percent) say they'd need more than $1 million to retire comfortably – the highest percentage of any generation.

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.

Which generation is the most financially stable? ›

Baby boomers have the most wealth among four recorded generations, but less wealth isn't necessarily an indication of financial problems. June 18, 2024, at 12:45 p.m. For current and future generations, it's crucial to start investing early and allocate as much as can be afforded.

TikTok is followed on the list of Gen Z's most trusted brand's relative to all U.S. adults by Snapchat, Spotify, Twitch, Discord, and Instagram.

The wisdom for the next generation, especially Gen Z, revolves around embracing financial literacy early. Understanding budgeting, saving, investing, and the use of credit wisely can set a foundation for financial independence and security.

The Gen X debt situation

The cohort also has the largest share of people with debt, nearly 99% carry some type of balance, LendingTree found. Gen Xers led the way in three of the four categories analyzed. The group — between 44 and 59 years old — has the highest median credit card, auto loan and student loan balances.

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.

Among Gen Zers living in the 100 largest metropolitan areas, the median percentage with nonmortgage debt is just over 97 percent, the analysis found. And the median nonmortgage debt of those Gen Zers hovers at around $16,560.

“The reason that millennials don't save as much as Gen Z is likely because they have more financial responsibilities,” Adams said. “For instance, many are homeowners, have families and pay higher ongoing expenses, such as groceries, clothing, insurance and medical costs.”

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.

They are generally more pragmatic, with both complicated idealism and worries for the future. 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.

Gen Z is known for its entrepreneurial spirit and independence. Many in this generation have grown up in the gig economy, with side hustles or freelance work being common experiences. They value autonomy and often seek roles that allow them to take ownership of their work and make independent decisions.