Gen Z is struggling financially more than Millennials did at their age: Study
Young members of Gen Z are struggling more financially today than Millennials did at their age 10 years ago, according to a new study published last week by the credit reporting agency TransUnion.
The study includes a survey conducted in February of 614 Gen Z consumers, aged 22-24, and 623 Millennials, who were 22-24 years old 10 years ago. It includes an assessment of credit bureau data from December 2023 of Gen Z consumers who are 22-24-year-olds, and it includes data from December 2013 of Millennial consumers who were 22-24 years old at the time. The study also includes interviews with Gen Z adults in February-March 2024.
The study shows that even as cost of living increases, especially amid high inflation, 22-24-year-olds today have lower income and higher debt-to-income ratios than 22-24-year-olds ten years ago.
Today, 22-24-year-olds are making an average of $45,493, according to the Q4 data from 2023. But, adjusted for inflation, 22-24-year-olds ten years ago were making $51,852, according to the Q4 data from 2013.
The debt-to-income ratio is also higher today than in 2013 – 16.05 percent compared to 11.76 percent.
The study indicates that higher balances today “reflect higher inflationary pressures on Gen Z,” according to the report. The average credit card balance for 22-24-year-olds today is $2,834, but ten years ago, it was $2,248.
In the survey, Gen Z 22-24-year-olds report being more stressed out about their financial situation than Millennials who were 22-24-year-olds ten years ago. Asked how confident or stressed out they feel about their financial situation, 14 percent of Gen Z respondents say they are “extremely stressed out,” compared to 8 percent of Millennial respondents who say the same, when describing how they felt ten years ago.
Similarly, only 8 percent say they’re “extremely confident” among Gen Z respondents, compared to 13 percent of Millennials who say they were “extremely confident” ten years ago about their financial situation.