Study Shows Gen Z Financially Worse Off Than Millennials Were At Same Age

A recent study by TransUnion has highlighted the growing financial difficulties 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, found that this younger generation is struggling 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 $51,825 that millennials were making in the fourth quarter of 2013.

Gen Z is grappling with a higher debt-to-income (DTI) ratio of 16.05%, compared to the 11.76% DTI ratio millennials had in 2013. TransUnion attributes this to Gen Z coming of age during a period of high inflation, which has risen 32% cumulatively since 2013.
Inflation peaked at 9.1% in June 2022, just as many Gen Zers were entering the workforce, and remained high at 4.5% in the first quarter of 2024, despite the Federal Reserve’s tightening efforts.

The study also revealed 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.

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 financial pressures faced by Gen Z are also taking a toll on 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. In contrast, 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.