‘I Am Struggling’: Why Gen Z Struggles Financially In 2024

The financial woes and struggles of Generation Z have become the foundation of viral videos, social media posts, and vlogs. People from older generations may be confused by it – especially when they consider how relatively young Gen Z “zoomers” are in comparison. However, the Gen Z struggle to stay afloat financially makes more sense than you may realize.

Student Loans Are A Financial Burden

Student loans play a key role in the financial struggle of Generation Z adults. Many of them have either recently graduated from college or are looking forward to attending in the next few years. Either way, student loans and financial aid in general may play a significant factor in the process.

One report states that the average student loan debt for those who obtained bachelor’s degrees near the end of 2023 was over $37,000. Further studies show that the average will continue to rise in the years to come.

The Abrupt Failures of Start-Up Businesses

Many people from Generation Z are planning to pave their own secular paths as business owners instead of employees. The studies consistently show that nearly 90% of start-up businesses fail; 10% of which fail within their first year.

Quite a few Gen Zers are struggling to build a successful start-up simply because of their limited knowledge, lack of experience, and the staggering odds against them. It is true that there are some that prove to be exceptions to the rule. However, the rule is still intact and proven to be accurate with each passing year.

Rent and Mortgage Payments Burn Holes in Bank Accounts

Another reason why Generation Z struggles to stay afloat financially today is due to the fluctuating housing expenses. The COVID-19 pandemic definitely did not make this any easier. If anything, the load has become even more burdensome since the pandemic started – not less.

The average rent amount throughout the United States is $1,372 as of rental market data collected in August of 2023. A lot of low-income Gen Zers (especially those who make minimum wage) can barely manage to pay that amount ever month much less any additional living expenses that come each month right along with it.

Shopping Sprees Exit As Financial Budgets Enter

One of the most challenging parts of adulting is the realization that needs trump wants when it comes to managing your household budget. If you are struggling to fulfill your needs financially, then the wants will always take a backseat unless you want to risk losing more than you think.

Fortunately, studies show that Gen Zers are taking a second look at their finances and making wise decisions. For instance, one survey showed that more from Generation Z are cooking at home instead of dining out and drastically limiting their grocery shopping trips to just the bare essentials to save money.

Mental Health And Self-Care Take A Toll On The Budget

A survey conducted with Generation Z adults ages 19-24 back in 2022 showed that over 40% of them were diagnosed with at least one mental health condition. It is interesting to see how much awareness mental health and self-care have received in recent years.

This is especially due to the growing number of celebrities and politicians becoming open about their own struggles. There is a lot of money that goes into therapeutic services each year. For instance, a therapy session will generally cost between $65 and $250 per hour. Even though insurance will cover most of it in some cases, the ongoing expense can still take a toll on a Gen Zer’s household finances.

Working From Home Was Not Always A Dream Scenario

The concept of being able to work from home seems like a dream come true. During the pandemic, quite a few employees got a chance to experience this as a reality. However, Gen Zers seemed to struggle more with the transition than those from older generations.

Quite a few Gen Zers may not have been on the job long before the pandemic started. This means that there was a lack of on-the-job training, which undoubtedly made their transition to remote more much more difficult than they expected. The impact of inflation and mass layoffs in various industries did not help either.

A Lack of Trust in the Economy

Studies show that Generation Z is losing trust and confidence in the U.S. economy. An October 2023 survey showed that less than 30% believed that the economy would improve – a decline compared to the same survey results from 2021.

Perhaps it is because Generation Z has not been around long enough to know about the highs and lows of previous economic fluctuations and recessions. Either way, most of the Generation Z adults strongly believe that the economic environment has made it even more challenging for them to survive or thrive in the world today.

Child Care Expenses Are Higher Than Ever

Did you know that the average cost of childcare services in the United States is more than $14,000 a year? When you compare that to the average annual income in the same country (over $31,100), it makes sense why there are so many Gen Zers struggling to make ends meet today.

Generation Z adults have used creative means to avoid this burden entirely or at least lighten it as much as possible. For instance, they are turning to their parents and grandparents for assistance with watching their children. They are also relying on neighbors or childcare services offered by their employer to reduce the associated costs.

Inherited Debt Make It Nearly Impossible To Get Ahead

There are some Gen Z adults that may inherit mortgages, outstanding debts, and other expenses from their immediate and extended family members. It may seem like a light load at first; however, the drastic limits placed on their ability to invest money elsewhere becomes apparent with time.

Gen Zers with the goal of achieving financial independence may have to delay the deadlines for their goals more than they like. In addition, there is the emotional stress and adverse impact on their credit score that make these types of inheritances more of a curse than a blessing.

Having An Active Social Life Can Get Very Expensive

The cost of maintain an active social life can also burn a huge hole into your wallet. Think about the money spent dining out, buying food and drinks from nightclubs, or even traveling to various places. Even making regular trips to the concession stands in movie theaters can exhaust your funds.

There are other ways to maintain an active social life without compromising your financial stability. For instance, you can research the various activities available in your area for free. You could also collaborate with your friends to pool funds and resources together for reduced expenses.

Cybercriminals Prey On Generation Z Adults

More than 53 million U.S. citizens were targeted by cybercriminals within just the first 6 months of 2022. About 10% of U.S. businesses and organizations currently do not have insurance that protects them against cyber-attacks.

Due to their lack of experience with cybercrime, hackers and identity thieves find it relatively easy to target Generation Z as victims. All the lessons that people from older generations learned in the past have not fully been taught to late Gen Zers, which makes them easy prey for experienced cybercriminals.

Unexpected Bills Throw Monkey Wrenches At Your Budget

One of the biggest monkey wrenches thrown at a financial budget is an unexpected bill. The University of Chicago conducted a study that showed nearly 60% of Americans have been surprised by at least one medical bill.

In addition to surprise medical bills, there are also unexpected disasters and financial burdens that come along without an invitation. For instance, car breakdowns, home appliance malfunctions, and other issues arise frequently that require consumers to make immediate adjustments to their bank accounts.

Filling The Gas Tank Is Much More Challenging Today

Keeping the gas tank filled in your automobile is much more of a challenge today than it was several years ago. The problem is that a substantial number of Generation Zers may not have even been licensed to drive during those days.

It is essential to prevent the gas tank from being empty simply because most people need their vehicles to get to work. One could say that there is an evil cycle that consists of you working to make money to put gas in your car so that you can keep driving yourself to work.

Low Wages Do Not Seem To Align With The Cost Of Living

Many find it challenging to make a living when the cost of living is much higher than their paid wages. Think of the average rent payment or mortgage amount in addition to such expenses as utility bills, cell phone service, Internet service, and taxes.

Quite a few Generation Z adults have taken on multiple jobs, side hustles and even gig opportunities to generate more income to supplement their low wages.

Social Media Lifestyles Spark Envy In Others

Comparing yourself to other people may also be a huge hurdle that gets in the way of success and overcoming financial struggles. Social media posts can easily make anyone jealous and envious of the lifestyles lived by other people.

In the digital age of 2024, it is very easy to ambitiously aim for the lives that other people live instead of being content with your own life. However, quite a few Gen Zers are able to come to grips with reality, become frugal, and make better decisions to achieve their long-term goals and eliminate their financial struggles.