Gen Z has had a tough go economically. Many graduated college when the U.S. was in the throes of the pandemic and unemployment was sky-high. They struggled to find work.
Then Gen Zers were faced with a period of rampant inflation as the economy improved. While inflation has eased, the cost of living is still high.
A March 2025 Bank of America report reveals that 52% of Gen Z employees aren’t making enough to live the life they want, and that inflation is one of their biggest financial challenges.
The report found that on average, Gen Z workers spend nearly twice as much as they earn. They don’t have enough money saved to cover even one month’s expenses.
This puts an entire generation at increased risk of debt and vulnerability if they’re laid off.
The Bank of America report found that Gen Z’s per-household spending on both necessary and discretionary items has grown faster than the overall population.
For example, in the past year, their spending on entertainment and travel rose 25.5%. Experien reports that the average Gen Zer carries $3,456 in credit-card debt.
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While they’re spending a lot on the here and now, they aren’t saving long term. Only 20% of Gen Zers are saving for retirement, according to a 2024 Teachers Insurance and Annuity Association of America (TIAA) report.
They don’t even have much saved in their bank accounts. Federal Reserve data shows that Americans under 35 have less cash in their transaction accounts than older cohorts, with a median balance of $5,400 — compared to $7,500 for 35 to 44-year-olds; $8,700 for 45 to 54-year-olds; and $13,400 for those aged 65 to 74).
Gen Zers are clearly trailing. While part of that can be attributed to lower wages, it may also be a byproduct of the way they prioritize discretionary purchases.
If you’re a Gen Zer without much in the way of savings, take heart. You’re young, meaning you have the advantage of time to build wealth and fund a comfortable retirement.
