Gen Z Faces Greater Financial Hurdles Compared to Millennials At The Same Age

A recent study conducted by consumer credit reporting agency TransUnion has shed light on the growing financial struggles faced by Generation Z (Gen Z) compared to millennials when they were the same age a decade ago. The survey, which included 614 Gen Zers between the ages of 22 and 24, revealed that this younger generation is grappling with lower incomes and higher debt-to-income ratios than their millennial counterparts.

According to the study, Gen Zers in the fourth quarter of 2023 were earning an average income of $45,493, which is over $7,000 less than the inflation-adjusted income of $51,852 that millennials were making in the fourth quarter of 2013. This disparity in earnings is further compounded by the fact that Gen Z is facing a higher debt-to-income (DTI) ratio of 16.05%, compared to the 11.76% DTI ratio millennials had in 2013.

The TransUnion study also found that Gen Z is relying more heavily on credit cards than millennials did at their age. In the fourth quarter of 2023, 84% of Gen Zers aged 22-24 had at least one general-purpose credit card, compared to just 61% of millennials in the same age group a decade earlier. Additionally, Gen Z’s average credit card balance stands at $2,834, slightly higher than the inflation-adjusted balance of $2,248 that millennials carried in 2013.

Auto loan balances are another area where Gen Z is facing greater financial burdens. The average auto loan balance for Gen Zers in 2023 is $21,767, higher than the inflation-adjusted balance of $19,043 that millennials had in 2013.

The high-inflation economy that Gen Z has come of age in, with a 32% rise in cumulative inflation since 2013, has further exacerbated their financial challenges.

The financial pressures faced by Gen Z are also reflected in their mental well-being. The TransUnion study found that 14% of Gen Z respondents reported feeling “extremely stressed out” about their financial situation, compared to just 8% of millennials a decade ago. Conversely, only 8% of Gen Zers felt “extremely confident” in their finances, compared to 13% of millennials in 2013.

As economic dissatisfaction grows among younger generations, polls indicate that Gen Z’s support for President Biden could significantly decrease in the November election, with more of them considering voting for former President Trump.