As a millennial, it’s been a strange adjustment to no longer be the “default young adult.” For years, “millennial” felt like a catchall term for “young person I’m annoyed with.” But now, we’re buying homes, having kids, and some are even grandparents—admittedly, none I know personally, but the oldest millennials are 44 now, so it’s safe to guess a few have reached that stage. These days, the title of “young adult generation” clearly belongs to Gen Z, whose members are between 13 and 28.
The financial struggles millennials face are well-documented. We graduated high school and college during the Great Recession, took out student loans for degrees that often didn’t live up to their promise, and have (and still do) struggled to afford homes. We’re waiting longer to have children—or skipping it altogether, though to be fair, that choice isn’t always about money. And when compared to our parents at the same age, we hold less than half their wealth.
Even so, I wouldn’t trade places with my parents or any prior generation. My parents and grandparents had to go through a friend of a friend to invest, and more often than not, those “connections” sold them insurance or annuities instead of helping them get into the stock market. These days, accessing solid financial information is easier than ever. Sure, there’s plenty of misinformation out there, but if you know where to look, you can teach yourself to invest, figure out the best way to pay off debt, or navigate buying a car or house—and so much more.
Gen Z’s Four-Letter Problem
Gen Z shares many of the same financial hurdles as millennials: homes are out of reach for many, college is costly (and often requires student loans), and many face tough job markets when they graduate—especially in tech. But there’s one key difference: debt.
Gen Z carries a higher average debt load than any other generation. The typical Gen Z adult has nearly $100,000 in debt—including credit cards, student loans, personal loans, medical debt, mortgages, and auto loans—though this average is skewed by a small but notable group within the generation that holds a lot of debt. Break it down, and 32% of Gen Z adults have no debt at all; 30% have some debt, but less than $50,000; 13% have between $50,000 and $100,000; and 11% have over $100,000. (I suspect the percentages don’t add up to 100% because of non-respondents.)
Why Gen Z Is in Debt
No doubt, some Gen Z members with over $100,000 in debt owe it to mortgages, but mortgages aren’t the most common type of debt for this group. Instead, credit cards top the list (56%), followed by student loans (31%), personal loans (23%), medical debt (19%), then mortgages (16%) and auto loans (10%). Young adults’ spending habits, which differ sharply from older generations, might explain this higher debt load.
Older households spend more on housing, household goods and services, and healthcare. Younger households, meanwhile, spend more on education, communication, transportation, and leisure. It makes sense: the older you get, the more you spend on healthcare, and younger people naturally invest more in education and staying connected. The standout difference, though, is that older households tend to prioritize spending on goods and services, while younger ones lean toward transportation and leisure.
We’ve known this for a while: young people prefer spending on experiences over stuff, and about 60% would rather have those experiences now than save for retirement. Not saving for retirement is definitely a problem, but choosing experiences over possessions isn’t—studies show experiential purchases make people happier, even when you account for price differences. Younger people are focusing their spending on what brings them joy, but unfortunately, some are taking it a bit too far.
How Young Adults Can Avoid Consumer Debt
In some ways, controlling spending on “things” is easier than controlling spending on experiences. With physical items, the happiness boost fades fast, and they don’t create lasting memories. Experiences, though, often come with pressure from friends and family to join in—whether it’s a dinner out or an expensive vacation—and to spend a certain amount.
Turning down experiences with loved ones is tough, but setting clear limits on how much you’re willing to spend can head off awkward conversations. Friends and family are far less likely to push you to spend on something you can’t afford if they know your situation. Talking about budgeting and money can be uncomfortable, but it’s way better than the alternative: living beyond your means.
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Young Adults’ Top Challenge (and How to Dodge It)
2025-08-27T14:51:00
As a millennial, it’s been a strange adjustment to no longer be the “default young adult.” For years, “millennial” felt like a catchall term for “young person I’m annoyed with.” But now, we’re buying homes, having kids, and some are even grandparents—admittedly, none I know personally, but the oldest millennials are 44 now, so it’s safe to guess a few have reached that stage. These days, the title of “young adult generation” clearly belongs to Gen Z, whose members are between 13 and 28.
The financial struggles millennials face are well-documented. We graduated high school and college during the Great Recession, took out student loans for degrees that often didn’t live up to their promise, and have (and still do) struggled to afford homes. We’re waiting longer to have children—or skipping it altogether, though to be fair, that choice isn’t always about money. And when compared to our parents at the same age, we hold less than half their wealth.
Even so, I wouldn’t trade places with my parents or any prior generation. My parents and grandparents had to go through a friend of a friend to invest, and more often than not, those “connections” sold them insurance or annuities instead of helping them get into the stock market. These days, accessing solid financial information is easier than ever. Sure, there’s plenty of misinformation out there, but if you know where to look, you can teach yourself to invest, figure out the best way to pay off debt, or navigate buying a car or house—and so much more.
Gen Z’s Four-Letter Problem
Gen Z shares many of the same financial hurdles as millennials: homes are out of reach for many, college is costly (and often requires student loans), and many face tough job markets when they graduate—especially in tech. But there’s one key difference: debt.
Gen Z carries a higher average debt load than any other generation. The typical Gen Z adult has nearly $100,000 in debt—including credit cards, student loans, personal loans, medical debt, mortgages, and auto loans—though this average is skewed by a small but notable group within the generation that holds a lot of debt. Break it down, and 32% of Gen Z adults have no debt at all; 30% have some debt, but less than $50,000; 13% have between $50,000 and $100,000; and 11% have over $100,000. (I suspect the percentages don’t add up to 100% because of non-respondents.)
Why Gen Z Is in Debt
No doubt, some Gen Z members with over $100,000 in debt owe it to mortgages, but mortgages aren’t the most common type of debt for this group. Instead, credit cards top the list (56%), followed by student loans (31%), personal loans (23%), medical debt (19%), then mortgages (16%) and auto loans (10%). Young adults’ spending habits, which differ sharply from older generations, might explain this higher debt load.
Older households spend more on housing, household goods and services, and healthcare. Younger households, meanwhile, spend more on education, communication, transportation, and leisure. It makes sense: the older you get, the more you spend on healthcare, and younger people naturally invest more in education and staying connected. The standout difference, though, is that older households tend to prioritize spending on goods and services, while younger ones lean toward transportation and leisure.
We’ve known this for a while: young people prefer spending on experiences over stuff, and about 60% would rather have those experiences now than save for retirement. Not saving for retirement is definitely a problem, but choosing experiences over possessions isn’t—studies show experiential purchases make people happier, even when you account for price differences. Younger people are focusing their spending on what brings them joy, but unfortunately, some are taking it a bit too far.
How Young Adults Can Avoid Consumer Debt
In some ways, controlling spending on “things” is easier than controlling spending on experiences. With physical items, the happiness boost fades fast, and they don’t create lasting memories. Experiences, though, often come with pressure from friends and family to join in—whether it’s a dinner out or an expensive vacation—and to spend a certain amount.
Turning down experiences with loved ones is tough, but setting clear limits on how much you’re willing to spend can head off awkward conversations. Friends and family are far less likely to push you to spend on something you can’t afford if they know your situation. Talking about budgeting and money can be uncomfortable, but it’s way better than the alternative: living beyond your means.