Less than 3 in 10 Gen Zers say they can pay all their bills, sending them back to their parents. With inflation hovering just under 8%, Gen Zers are having trouble staying financially stable early in adulthood among the rising costs of everyday items. Only 28% of Gen Zers say they can afford to pay all of their bills on time.
In this new study from Harris Poll, commissioned by DailyPay, The majority of Gen Zers are saving the same – if at all. As a whole, they are more likely to say they have been able to save either less money compared to last year, the same amount as last year, or no money at all. With rising interest rates for loans, high inflation, and increased living costs, Gen Z struggles to get ahead and make ends meet.
Gen Z Worries for Economic Future
Not typically the most pessimistic generation, Gen Z is singing a different tune when it comes to predicting their overall financial situation. 80% of this younger demographic feel the economy will either stay the same or decline over the next 12 months. Furthermore, 41% are worried it will be even tougher to pay their utilities, medical, credit card, and insurance bills due to high inflation. About the same number think buying food and other staples will continue to become more challenging.
The ability of Gen Z to save for the future is also heavily impacted. Seventy-eight percent say they have been able to save less money compared to last year, or at best, a similar amount.
What Can Gen-Z Do?
Mike Hunsberger, ChFC, says, “Gen Zers who find themselves unable to make ends meet should first assess where their money is going. They should ruthlessly cut out any expenses they can until their income and expenses are balanced. This is critical because the last thing you want is to get into a debt spiral with credit cards. If that's started, it's imperative that they stop it with credit card interest rates at all-time highs. Once they've stopped accumulating more debt, they should build a realistic budget.”
Parental involvement may be the key to helping Gen Z get on the right track. “If their parents are in a position to help,” says Hunsberger, “I would want to ensure the Gen Zer is on a sustainable path and had a plan to avoid getting into this situation in the future. If the parents aren't able to help, the Gen Zer will need to either find a way to increase their income or continue to reduce their expenses.”
Many parents and children agree with Hunsberger; a whopping 48% of Gen Z say they're unable to move out of their parent's home due to financial struggles.
Make a Budget
Jordan Nietzel, a financial advisor who works with young professionals, says the key to getting through this time is to get organized and make a budget.
“The first step to getting your cash flow on track is to get organized. Write down your take-home pay along with the bills you have to pay. Rent, debt payments, utilities, phone bills, etc. Organize it on a calendar or timeline so you can see when your income is coming in and when your bills need to be paid.”
“Hopefully, there is a gap between your income and the bills you have to pay before your next paycheck. That gap is what you have to spend on the variable or flexible expenses that you have some control over, like restaurants, groceries, Netflix subscriptions, etc. Laying it out this way gives you a clear amount that you can afford to spend on those flexible expenses and still pay your bills.”
The study ends on a slightly positive note; 21% of Gen Z believe the U.S. economy will improve over the next year. Gen Z and their parents must undoubtedly hope that the optimistic minority proves right in this situation.
This post was produced by A Dime Saved and syndicated by Wealth of Geeks.
source https://wealthofgeeks.com/gen-z-living-costs/
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