The cost of everything is up these days: housing, groceries, utilities, gas, interest rates, etc. Sky-high inflation in a post-pandemic economy has resulted in a significantly higher cost of living. Sadly, the younger generation is really feeling the negative effects of today’s financial reality.
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Gen Zers (those born between 1996 and 2012) have it harder when it comes to their overall finances compared to their older baby boomer counterparts. Dubbed the unluckiest generation in U.S. history, there are several factors at play making it more difficult for Gen Z.
Here are four ways that Gen Zers have it harder than boomers when it comes to finances and getting ahead, according to Fortune and CNBC.
1. Pensions Are Less Common These Days
As late as 1990, nearly half of the private sector workforce had access to a pension. Fast forward to today and the younger generation largely has to fund their own retirement through a managed 401(k) or other investment vehicle.
Some boomers have the luxury of relying on a pension for life once they retire, but most members of Gen Z have to ensure they’re saving enough money for as long as they can. Saving early and often can make a huge difference in how comfortable you’ll be once you stop working.
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2. The Cost of College Is Much Higher for Gen Zers
The cost of college tuition is out of control these days. Wages have not kept up with rising education costs and Gen Zers are disproportionally burdened when compared with boomers when they attended college.
In the U.S., the average cost of college tuition at a private institution for the 2023-2024 school year is a staggering $42,162, according to U.S. News & World Report.
3. The Cost of Buying a Home Is Also Much Higher for Gen Zers
The pandemic spurred significant demand in the housing market. This demand, combined with rampant inflation and rising interest rates, made it more expensive than ever to buy a home.
This spells bad news for Gen Z, when compared with baby boomers — many of whom were able to buy homes when prices were lower and when wages were more in line with housing costs.
To put this into perspective, Redfin recently reported that the median home-sale price in the U.S. is up 4.9% year-over-year to an all-time high of $397,250. At the same time, the 30-year fixed rate mortgage average in the U.S. hovers at around 6.95% as of July 3, 2024, according to The Federal Reserve Bank of St. Louis. That’s up from a pandemic-era low of 2.67% on Dec. 31, 2020.
4. Gen Zers May Need To Take on More Side Hustles To Make Ends Meet
Higher costs and more difficult economic conditions mean that Gen Zers may need to take on a side hustle to stay afloat and reach financial goals. This can range from becoming a rideshare driver, babysitting, dog walking, or starting your own side business.
The reality is that many members of Gen Z frequently face financial hurdles that require more income to get ahead in today’s economy.
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This article originally appeared on GOBankingRates.com: 4 Ways Gen Zers Have It Harder Than Boomers Financially
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