When it comes to saving, Gen Z asks: ‘What's the point?' That's dangerous, expert says
Gen Z seems to have a case of economic malaise.
Nearly half (49%) of its adult members — the oldest of whom are in their late 20s — say planning for the future feels 'pointless,' according to a recent Credit Karma poll.
A freewheeling attitude toward summer spending has taken root among young adults who feel financial 'despair' and 'hopelessness,' said Courtney Alev, a consumer financial advocate at Credit Karma.
They think, 'What's the point when it comes to saving for the future?' Alev said.
That 'YOLO mindset' among Generation Z — the cohort born from roughly 1997 through 2012 — can be dangerous: If unchecked, it might lead young adults to rack up high-interest debt they can't easily repay, perhaps leading to delayed milestones like moving out of their parents' home or saving for retirement, Alev said.
But your late teens and early 20s is arguably the best time for young people to develop healthy financial habits: Starting to invest now, even a little bit, will yield ample benefits via decades of compound interest, experts said.
'There are a lot of financial implications in the long term if these young people aren't planning for their financial future and [are] spending willy-nilly however they want,' Alev said.
Why Gen Z feels disillusioned
That said, that many feel disillusioned is understandable in the current environment, experts said.
The labor market has been tough lately for new entrants and those looking to switch jobs, experts said.
The U.S. unemployment rate is relatively low, at 4.2%. However, it's much higher for Americans 22 to 27 years old: 5.8% for recent college grads and 6.9% for those without a bachelor's degree, according to Federal Reserve Bank of New York data as of March 2025.
Young adults are also saddled with debt concerns, experts said.
'They feel they don't have any money and many of them are in debt,' said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California. 'And they're wondering if the degree they have (or are working toward) will be of value if A.I. takes all their jobs anyway. So is it just pointless?'
About 50% of bachelor's degree recipients in the 2022-23 class graduated with student debt, with an average debt of $29,300, according to College Board.
The federal government restarted collections on student debt in default in May, after a five-year pause.
The Biden administration's efforts to forgive large swaths of student debt, including plans to help reduce monthly payments for struggling borrowers, were largely stymied in court.
'Some hoped some or more of it would be forgiven, and that didn't turn out to be the case,' said Sun, a member of CNBC's Financial Advisor Council.
Meanwhile, in a 2024 report, the New York Fed found credit card delinquency rates were rising faster for Gen Z than for other generations. About 15% had maxed out their cards, more than other cohorts, it said.
It's also 'never been easier to buy things,' with the rise of buy now, pay later lending, for example, Alev said.
BNPL has pushed the majority of Gen Z users — 77% — to say the service has encouraged them to spend more than they can afford, according to the Credit Karma survey. The firm polled 1,015 adults ages 18 and older, 182 of whom are from Gen Z.
These financial challenges compound an environment of general political and financial uncertainty, amid on-again-off-again tariff policy and its potential impact on inflation and the U.S. economy, for example, experts said.
'You start stacking all these things on top of each other and it can create a lack of optimism for young people looking to get started in their financial lives,' Alev said.
How to manage that financial malaise
Young adults should try to rewire their financial mindset, experts said.
'Most importantly, you don't want to bet against yourself,' Sun said.
'See it as an opportunity,' she added. 'If you're young and your expenses are low, this is the time to invest as much as you can right now.'
Time is working in their favor, due to the ability to compound investment growth over multiple decades, Alev said.
While investing might 'feel impossible,' every little bit helps, even if it's just investing $10 a month right now into a tax-advantaged retirement account like a Roth IRA or 401(k).
The latter is among the easiest ways to start, due to automatic payroll deduction and the possibility of earning a 'match' from your employer, which is 'probably the closest thing to free money any of us will get in our lifetime,' Alev said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
11 hours ago
- The Independent
There's a new retirement age for 2026 if you need to collect Social Security
Don't quit your day job — because Americans will soon have to wait longer than ever to retire. For the first time since Social Security's creation 90 years ago, the full retirement age is set to hit 67 years old in 2026. That is of course, if Social Security lasts long enough for you to reach that age, with new data showing the program is likely to run out of money by 2034. President Franklin D. Roosevelt signed the Social Security Act into law in 1935, creating an insurance program to provide workers aged 65 and older with a steady income in retirement. Introduced to fight elder poverty, biographer Kenneth S. Davis described it as "the most important single piece of social legislation in the entirely of American history." But next year, Americans will have to wait until they turn 67 before they can collect payments with no limitations. Those approaching retirement face important decisions about when to collect their Social Security payouts — with the repercussions being significant and worth thousands of dollars. Should I retire at 62, 65, 67, or 70? When to start collecting Social Security benefits depends entirely on individual circumstances. Americans can opt to take early retirement at 62 years old, though, monthly benefits will be reduced permanently. Those born in 1959 will be the first group to face a full retirement age of exactly 67 and each year a claimant waits past the FRA permanently increases their benefit (until 70). Using a FRA of 67 and a base monthly benefit of $1,800, here's how the numbers play out. Americans turning 62 next year – the first age group that can claim Social Security benefits – would receive just 70 percent of the full amount, or $1,260 per month, if they begin early retirement. At age 65, the benefit rises to roughly 87 percent of the full benefit, or $1,560. Retiring at 67 unlocks the full benefit of $1,800. For those who delay retirement until age 70, monthly payments climb to an estimated $2,323, around 124 percent of the base amount. Benefits no longer increase after becoming a septuagenarian. Why did the law change? The new retirement age did not happen overnight and has been climbing gradually after Congress passed a set of reforms which were signed into law by President Ronald Reagan more than four decades ago. While the Social Security Act was born in the depths of the Great Depression, its 1983 amendment came amid another era of economic strain. The system was on the brink of financial collapse after the U.S. had experienced back-to-back recessions. Benefit payouts began to exceed income, meaning Social Security, as it stood, was no longer sustainable. The original act was designed when life expectancy in the U.S. was just 61 years, so there were vastly fewer retirees and benefits would not have been collected as long. By 1983, Americans were living much longer, with the average life expectancy over 74 years (79 today). The ratio of active workers to retirees also shrank dramatically, from 42 to 1 to 3.6 to 1 (2.7:1 today). The law change meant that people turning 65 in 1990 were the last to have a full retirement age of exactly 65. Starting in 1991, the full retirement age increased by two months each year, meaning those turning 65 in 1991 had to wait until 65 years and 2 months; in 1992 it was 65 years and 4 months, and so on. From 1996 to 2007, anyone turning 65 had an full retirement age of 66 years. After that, the retirement age continued rising by two-month increments until it reached 67 for those turning 65 in 2026 and beyond.
Metro
13 hours ago
- Metro
Co-op is offering 25% off shops over £40 for members as a ‘thank you' gesture
Co-op has announced it will be giving members £10 off a minimum spend of £40, following a cyberattack that occurred in May. This equates to a 25% discount. The food retailer, which revealed it's only just started to recover from the attack, had huge amounts of customer data stolen. The hackers also compromised stock availability. As a 'thank you' gesture, Co-op members, many of whom will have been victims of the scam, will receive the discount. The deal does not apply to non-members. In May, Co-op experienced a cyberattack, in which customer and employee data were stolen. Parts of the company's IT system were shut down, which also resulted in empty shelves. Following the hack, Co-op released a statement apologising to customers. The company also assured members it was doing everything to bring the organisation 'back to normal as quicky, and as safely, as possible.' Since the attack, Co-op has been gradually restocking its stores. A few days ago, Matt Hood, the managing director for Co-op Food, reported that the company's 2,300 food stores are now returning to usual trading. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Hood said: 'I'm very proud that, thanks to the work of our colleagues, we are very near to making a full and complete recovery from the recent cyber-attack on our Co-op, and I'm delighted to see our stores looking back to normal and being able to serve our shoppers and communities.' More Trending Hood then thanked member owners for their 'support and patience' during this 'very difficult time.' He said of the 25% discount: '[We] hope this gesture of appreciation goes a little way to showing them our thanks, with more value rewards to come over the summer.' The £10 off can only be claimed via an in-store shop. The offer can be used by members once and takes effect from June 18 until midnight on June 24. New members will also be able to take advantage of the deal. Simply scan your card at the self-checkout, or scan manually with a cashier, and the discount will immediately be deducted from your final shop. View More » MORE: I tried Gen Z's new favourite pre-drink that's only £2.99 from Aldi MORE: 16,000,000,000 Google, Apple and Facebook passwords leaked in 'one of largest data breaches ever' MORE: Morrisons customers have until Sunday to claim £30 of freebies Your free newsletter guide to the best London has on offer, from drinks deals to restaurant reviews.
The Herald Scotland
20 hours ago
- The Herald Scotland
Trump approval rating tanks as Americans oppose GOP agenda
It's summer now, and the report card has arrived. Americans give Trump a failing grade on the budget, trade and immigration. That's tough to swallow for a politician who gauges everything on public perception. Trump, being Trump, is now pivoting to distractions, touting a military parade that flopped as an expensive boondoggle and then flipping from diplomacy with Iran to potentially ordering air strikes on that country. Take our poll: Should US go to war with Iran or support Israel from afar? | Opinion Americans disapprove of budget bill slashing Medicaid Let's start with Trump's budget, which Republican leaders in Congress call the "one big, beautiful bill" in honor of their continuing deference to whatever he wants and the dereliction of their duty to serve as a coequal branch of our government. The version that narrowly passed the House slashed federal safety net programs to boost tax cuts for the wealthiest Americans. Some senators, seeking to make things even better for the rich at the expense of the poor, want bigger cuts to Medicaid, food stamps and other programs. Opinion: Trump lied about the LA protests so you wouldn't see what he's really doing A batch of recent polls shows Americans reject that: A June 11 Quinnipiac University poll found that 53% of American voters oppose the budget bill, while 27% approve it. Nearly half of the voters polled said funding for Medicaid should go up, not down, while 40% said it should stay the same and just 10% wanted it cut. A June 16 Associated Press-NORC Center for Public Affairs Research poll found that 50% of Americans think we spend too little on Medicaid, while 31% say we spend enough and just 18% say we spend too much. Forty-five percent of Americans think we should spend more on food and nutrition assistance, while 30% say we spend enough and 24% say we spend too much. A June 17 KFF Health Tracking Poll found that 64% of Americans hold an unfavorable view of Trump's budget bill, while 83% of them hold a favorable view of Medicaid. Republican support for the bill came in strong at 61% at first, but then dropped by 20 points when the Republicans polled heard details about how the legislation would force millions off their health care plans. Polling finds Americans disagree with Trump on immigration, economy, border security This much seems clear: The more Americans learn about Trump's One Big Beautiful Bill Act, the more they find it small-minded and ugly. That explains the artificial deadlines. Opinion newsletter: Sign up for our newsletter on people, power and policies in the time of Trump from columnist Chris Brennan. Get it delivered to your inbox. Trump and his Republican allies in Congress want to wrap this up by July 4. But Republican infighting - moderates who fear it goes too far, far-righters who complain it doesn't go far enough - will make for a contentious Congress for at least the next two weeks. While we wait, Trump is seeing his support on immigration - once his strongest issue - melt away in the summer of Immigration and Customs Enforcement raids. The Quinnipiac University poll found 54% of the registered voters surveyed opposed his approach to immigration, while 43% approve and 3% had no opinion. Trump campaigned in 2024 on reviving America's economy. But his trade wars, which have hit our country's international allies just as hard or harder than our geopolitical foes, are unpopular. Quinnipiac found that just 38% approve of Trump's trade policy, while 57% disapprove and 6% had no opinion. The AP-NORC poll found that 32% of Americans think we spend too much on border security, while 37% think we spend the right amount and 29% think we spend too little. Trump's approval rating continues to tank. Does it matter? In this time of divisiveness, a majority of Americans can agree on one thing: Trump is disappointing them as president. Just 38% of the votes surveyed by Quinnipiac approve of Trump's job performance, while 54% disapprove. Opinion: Threats against judges nearly doubled under Trump. Republicans blame the victim. That tracks with a Pew Research Center poll released June 17, which found that 41% of those polled approve of Trump's performance while 58% disapprove. Pew noted that Trump has lost ground in his approval rating since he was sworn into office again on Jan. 20. Don't expect Trump to spend too much time worrying about what Americans tell pollsters. He has a long history of touting polls when they hold good news for him and dismissing them when they don't. He also suggested just before the 2024 election that releasing poll results he didn't like "should be illegal." Here's what you can expect: more distractions from Trump as the Republicans fights it out on which version of his budget bill passes or fails in Congress. If they listened to Americans, they would kill the bill and start from scratch. Follow USA TODAY columnist Chris Brennan on X, formerly known as Twitter: @ByChrisBrennan. Sign up for his weekly newsletter, Translating Politics, here.
