Millennials had it bad financially, but Gen Z may have it worse

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Generation Z is spending more on housing and car insurance than millennials did. They’re also more likely to be in debt, despite higher wages and more jobs.

Generation Z has been disproportionately pummeled by rising prices, higher housing costs, larger student loan balances and more overall debt than the millennials before them.While both generations came of age in the midst of an economic upheaval, Gen Z is spending more on necessities than millennials did at the same age, according to a Washington Post analysis of Bureau of Labor Statistics data. While millennials are between 28 and 43, Gen Z generally refers to those ages 12 to 27.

The financial difficulties burdening Gen Z could help explain President Biden’s challenges in connecting with younger voters, who cite inflation as their top concern. Justunder 30 said in May that they would support Biden if the election were held today, giving him a two percentage point lead over Donald Trump, according to the University of Chicago’s GenForward survey.

Roughly 1 in 7 Gen Zers are maxed out on their credit cards, more than any other generation, according to the New York Fed. The ripple effects of that debt are also far higher than in the past, with average credit card interest rates at an all-time high,“Even if you adjust for inflation, these credit card balances have gone up by about 25 percent. Delinquencies are higher among young adults now than they have been in the past,” said Ted Rossman, a credit card analyst at Bankrate.

“We’re at an inflection point: coming to age in a time of rising inflation and rising interest rates — and that will stay with them,” said Jimmie Lenz, a financial economics professor at Duke University whose work focuses on generational behavior. “There’s the immediate impact: higher monthly payments on your credit card. But there are also going to be long-term impacts, like it’s going to be harder to buy a home.

Wyckoff is hoping to return to school. He has worked a series of jobs to save up — driving a shaved-ice truck and working as an assistant at a law firm — and is applying for scholarships and grants to ease the financial burden.

Source: Insurance Report (insurancereport.net)

 

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