Gen-Z Faces Financial Challenges, Stress, Anxiety And An Uncertain Future (2024)

FAQs

Gen-Z Faces Financial Challenges, Stress, Anxiety And An Uncertain Future? ›

Saving for retirement seems out of reach and will become even harder. Almost 60% of Gen-Zers say their basic needs are not being met. They're plagued with concerns about finding stable, well-paying jobs. Without a secure position comes uncertainty and discomfort.

Gen Z's Financial Reality is an Everyday Struggle

Workers in their twenties today have 86% less purchasing power than baby boomers did at the same age. “The cost of public and private school tuition has increased by 310% and 245%, respectively, since the 1970s” (para.

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.

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 Zers are reporting higher rates of anxiety, depression, and distress than any other age group, according to a 2022 McKinsey study. The same study found that Gen Z was the least likely cohort to seek out medical care for those conditions because behavioral health care is too expensive.

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.

According to a recent Gallup poll, just 15% of Gen Zers said their current mental health/well-being is excellent. This number is all the more surprising because in the same study, 76% of respondents expressed optimism about the future, and 82% are confident that they'll achieve their goals someday.

1-in-5 of Gen Zers live with their parents to save money. Although Gen Zers are 12% less likely than older generations to invest in a 401(k), they are 11% more likely to invest in a Roth IRA. Gen Zers are 62% more likely than older generations to have no expectations of returns on their investments.

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.

Younger American (millennial and Gen Z) families represented 33.4% of households and owned 9.2% of total family wealth (72% less wealth) in 2023. The baby boomers' shortfall was the smallest of the generations.

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 .

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.

Gen Z is upending stigma and redrawing the boundaries of social norms. Topics formerly considered impolite or taboo, such as gender and sexuality, personal satisfaction with life and career choices, financial income, and psychological wellbeing, are commonplace conversation starters for this age group.

Gen Zers face greater obstacles to financial success

Not only are their wages lower than their parents' earnings when they were in their 20s and 30s, but they are also carrying larger student loan balances.

Financial literacy tends to be low within each of the five generations, but particularly so among Gen Z. Two-thirds of Gen Z could answer only 50% or less of the index questions correctly.

Careers and money are also playing on the anxieties of Generation Z. 41% said they feel anxious about the future careers, and 37% identify a lack of money as a concern.

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.

For example, a new study by the Investment Company Institute (ICI) finds that “Gen Z households have nearly three times more assets in the [retirement] plan accounts (adjusted for inflation) that Gen X households did at the same age.” More Gen Z-ers have retirement plans set up and they've saved more in those accounts.

1-in-5 of Gen Zers live with their parents to save money. Although Gen Zers are 12% less likely than older generations to invest in a 401(k), they are 11% more likely to invest in a Roth IRA. Gen Zers are 62% more likely than older generations to have no expectations of returns on their investments.

How Gen Z and Millennials Differ With Money Habits. Even though both generations value saving money, Gen Z is far ahead of millennials in terms of how much they're putting away. According to Finder's Consumer Confidence Index, Gen Z saves an average of $857 per month, while millennials save $294.