How the generations stack up financially


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By many measures, Generation Z is doing well.

Compared with their parents at this age, young adults are more likely to have a college degree and work full time — particularly women, who are not only achieving increasing levels of education but also earning more.   

However, Gen Z adults are also less likely to own a home, be married or have children.

Today’s young adults are reaching those key milestones later than their parents did in the early 1990s, according to a recent report by the Pew Research Center. Pew surveyed about 1,500 adults between the ages of 18 and 34 and more than 3,000 parents of adult children. Gen Z is generally defined as those born between 1996 and 2012, including a cohort of teens and tweens.

Student loan debt weighs on Gen Z

Although young adults today are much more likely than their parents to have a four-year college degree, work full time and have higher wages than their parents did 30 years ago, they are also more likely to have outstanding student loans, Pew found.

Not only is it common to carry education debt, but those balances have soared, the report also said, primarily as a result of the rising cost of college.

“They [Gen Zers] are more highly educated but they are taking on so much more debt, that is making it harder,” said Kim Parker, Pew’s director of social trends research.

Most people with student loans say they’ve had to delay one or more key life milestones because of their debt, other studies also show.

“Student loan debt prevents family formation, it prevents people from making decisions about their life, about purchasing a home, about buying their first car, about getting married, about having children,” Nicole Smith, chief economist at the Georgetown University Center on Education and the Workforce, previously told CNBC.

But that’s not the whole story.

The housing affordability crisis is also to blame

In addition to hefty student loan balances, inflation’s recent runup caused rent and housing prices to soar.

Between home prices and mortgage rates, 2023 was the least affordable homebuying year in at least 11 years, according to a separate report from real estate company Redfin.

“There are so many challenges with the cost of housing,” Pew’s Parker said. “That is a factor holding young adults back.”

Now, 31% of Gen Z are living with their parents because they can’t afford to buy or rent their own space, a separate report by Intuit Credit Karma found.

Even those who live on their own still lean on their family for financial support. Only 45% of young adults, ages 18 to 34, say they’re completely financially independent from their parents, according to Pew.

When I was growing up, 80 or 90% of people in my generation did better than their parents did. And those numbers have dropped substantially.

Janet Yellen

Secretary of the Treasury Department

“When I was growing up, 80 or 90% of people in my generation did better than their parents did. And those numbers have dropped substantially,” Treasury Secretary Janet Yellen recently told ABC News.

Most Gen Zers agree it’s harder today to make it on their own than it was for their parents when they were starting out, several studies show.

Although consumers as a whole are feeling more confident about the economy than they have in years, young adults blame current conditions for the affordability problems they face — coining the term “silent depression” to explain why financial independence is a work in progress.

More from Personal Finance:
3 ways Gen Zers can build credit
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Gen Z, millennials are ‘house hacking’ to become homeowners

Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a Bankrate report.

Additionally, 53% of Gen Zers say higher costs are a barrier to their financial success, a separate survey from Bank of America found.

And 73% of Gen Z respondents said today’s economy makes them hesitant to set up long-term financial goals, according to a recent Prosperity Index study by Intuit

Living with mom and dad has its benefits

Overall, the number of households with two or more adult generations has been on the rise for years, according to another Pew Research Center report. Now, 25% of young adults live in a multigenerational household, up from just 9% five decades ago. 

Meanwhile, as living with mom and dad has become more common for young adults — it’s also more socially acceptable, according to Parker.

Parents today are more involved in their adult children’s lives, often calling, texting and even keeping tabs on each other with GPS apps, Pew also found — and grown kids say they are largely fine with that.

“Both parents and young adults rate their relationships positively,” said Rachel Minkin, research associate at Pew.

Young adults who live at home even say the arrangement has been good for their relationship and financial situation and most also said they rely on their parents for advice on their jobs, finances and physical health.

There is, in fact, an economic benefit to these living arrangements, Pew found, and Americans living in multigenerational households are less likely to be financially vulnerable.

There are emotional benefits to these living arrangements as well, Parker said. “It might be keeping those ties to their parents closer.”

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About the Author: Tony Ramos

Tony Ramos is a seasoned expert in business funding and real estate investment, with a remarkable journey spanning over 20 years. His expertise in flipping properties and implementing the buy-and-hold strategy has positioned him well in the real estate investment sector. Tony's profound understanding of financial strategies extends to teaching individuals and businesses how to become debt-free and leverage the power of LLCs for funding. For insights, mentorship, or collaboration opportunities, Tony can be reached at businessfundingnopg@gmail.com. Connect with him to unlock the potential of smart financial strategies and embark on a path to financial success and freedom.

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