A stark financial reality faces young members of Gen Z, who are struggling more than their Millennial counterparts did at the same age a decade ago. According to a recent study by TransUnion, 22-24-year-olds today grapple with lower incomes, higher debt-to-income ratios, and increased financial stress.
The study’s findings, based on surveys, credit bureau data, and interviews, paint a concerning picture of Gen Z’s financial well-being.
The data reveals that Gen Z 22-24-year-olds earn an average of $45,493, significantly lower than the inflation-adjusted $51,852 earned by Millennials at the same age ten years ago.
Also, the debt-to-income ratio has risen from 11.76% to 16.05%, reflecting higher inflationary pressures on Gen Z. Credit card balances have also increased, with an average of $2,834 compared to $2,248 a decade ago.
The financial strain is taking a toll on Gen Z’s mental health, with 14% reporting extreme stress about their financial situation, compared to 8% of Millennials ten years ago.
Conversely, only 8% of Gen Z respondents feel extremely confident about their finances, compared to 13% of Millennials at the same age. As the cost of living continues to rise, it’s clear that Gen Z faces unique financial challenges that require attention and support.
