By Kate Cheesman, Vice President, Customer Success, DailyPay
For the youngest members of our workforce, the high cost of everything is preventing them from moving out of their parent’s house in search of personal independence. According to new research from the Harris Poll and DailyPay, 54% of 18-25-year-olds have made the choice to live with their parents given the current economic climate. With the average starting salary for the graduating class of 2022 at $55,260, many college graduates are opting to save money and tackle the nearly 8% inflation from the comfort of their childhood bed.
To make matters worse, nearly half (47%) of Gen Z already carry some form of debt, including through credit cards and student loans yet only 28% of Gen Zers say they are typically able to pay all of their bills on time. Thus, it’s no surprise that according to the Apartment List’s October 2022 National Rent Report, the national rental index fell by 0.7 percent over the course of October, marking the second straight month-over-month decline, and the largest single-month drop in the history of their index, going back to 2017.
However, Gen Z is extremely resourceful. For a group that came of age with the backdrop of a global pandemic, they certainly have faced daunting challenges in their development. Here are three ways, Gen Z can survive and thrive in this current challenging and uncertain economic climate:
1. Develop a Side Hustle:
According to a 2021 Bank of America survey, more than 6 in 10 Gen Zers have started a side hustle, oftentimes leveraging their social media skills and connections. This provides them with the opportunity to build up enough of a nest egg to buck the trend and move away from mom and dad. So how much can you actually make from a side gig? A recent survey found the majority of respondents (36.8%) earned between $100 and $499 per month from their side hustle. That supplemental cash is critical when starting out on your own.
2. Be Your Own CFO:
For a generation that spends half of their waking hours on their phone, there are very popular budgeting apps that can help Gen Zers create and stick to a budget including Mint, Goodbudget, and EveryDollar. But these tools are not effective if your spending does not align with your income. Shop smart and strategically. Don’t be lured by name-brand brands when similar quality can be had elsewhere. For food - buy in bulk when possible. This will give you all the more reason to cook at home more frequently.
3. Your Employer Can Help
The Great Resignation yielded some great benefits for millions of employees nationwide. For many, open enrollment runs into mid-December, so the time is now to take advantage of all that your employer can offer to weather inflation. Tuition reimbursement, commuting stipends, childcare/pet care, and on-demand pay are all programs that can help put dollars back in your pocket.
With these economic survival tips, Gen Z can set themselves on a path toward financial wellness. The good news is that these uncertain economic times haven't seemed to dampen Gen Z’s long term optimism as the Harris Poll reveals only one-third (33%) are worried it will be more challenging for them to buy a house because of inflation. For them, the American Dream of home ownership is still alive, it just might mean sharing a roof with the parents a little while longer.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.