Sorry, Gen Z, But Economic Anxiety Isn’t Going Away

Less than a third of Gen Z feels financially secure while just more than half feels “very or extremely worried about not having enough money,” according to a recent study by consulting firm EY. “Welcome, the water’s warm!” says every American millennial.

After years of being told conditions would improve and to just grow up, millennials, as a collective, are treading water at best. In fact, 73% of millennials are likely to be living paycheck to paycheck, according to a LendingClub report. A separate survey by Investopedia found that three-fourths of millennials, who range in age from 27 to 42, were at least somewhat stressed about their finances.

Financial anxiety has become an exhausting part of adulthood reality, especially when it seems as if another recession or major world shock could upend whatever financial security younger adults have established.

As a personal finance writer, I’d love to tell millennials and older Gen Zers (the full generation ranges from 11 to 26) that just changing their mindset and taking control of their financial lives would release them from worry. To a degree, it’s true. Focusing on what’s within your control, identifying your core values and learning how to live within your means while splurging on that which you care most about can yield what feels like a rich life.

But none of these behaviors is easy, and all of them require achieving a baseline of financial comfort that is often elusive to young consumers who haven’t had a chance to build up savings or establish deep professional networks.

Even diligent financial behaviors don’t always serve as protection. The most robust emergency savings funds were easily drained in the pandemic for those in industries that shut down for extended periods. Inflation has eaten away at the gains of negotiating for a higher salary, getting a promotion or job-hopping for more money. Young adults also have to shell out a significantly greater portion of their income on housing than their parents did.