Gen Z’s Financial Reality as Nearly Half Run Out of Money Each Month

Nearly half of Gen Z runs out of money each month, and less than a quarter consider themselves financially stable, according to a recent survey from Step.

Why It Matters

Born between 1997 and 2012, Gen Z is expected to make up approximately 30 percent of the global workforce, according to the U.S. Bureau of Labor Statistics. Gen Z is facing potentially higher financial pressures than their predecessors, amid high inflation, recession fears, a student debt crisis, and widespread housing unaffordability.

What To Know

Step, a modern financial platform designed for Gen Z, surveyed 1,500 respondents using an in-app program for active users on the platform. The survey reported that 41 percent run out of money nearly every month, and only 22 percent consider themselves to be financially stable.

A further 25 percent reported that they had gone more than a week without being able to afford essentials, such as rent, food and bills. Twenty-nine percent report having nothing by the end of the month, and 34 percent say they have less than $100.

Twenty percent of respondents reported working more than one job to make ends meet.

Newsweek spoke to Professor Lin Peng, a finance professor at Baruch College, about Gen Z’s financial struggles. “There are two primary factors contributing,” she said over email.

First, she pointed to structural economic challenges, which she broke down into three key areas: high costs of education, housing and health care costs and stagnant wages and job insecurity.

“Many Gen Z individuals carry substantial student debt as the cost of higher education has risen significantly over the past few decades. The burden of these loans, combined with the rising cost of living, leaves little room for financial flexibility,” Peng said, adding: “Housing affordability continues to be a significant barrier, especially in urban areas where rent has skyrocketed. Similarly, healthcare costs in the U.S. remain a major strain, even for those with insurance.”

Peng noted, “While unemployment is generally low, many entry-level jobs offer stagnant wages that have not kept up with inflation, leaving young workers struggling to make ends meet. The prevalence of gig economy jobs exacerbates financial instability, as these roles often lack job security, benefits, and predictable income.”

Peng also highlighted social media and consumerism culture as the other primary contributing factor to Gen Z’s financial insecurity. “Social media has created a pervasive culture of consumerism, where Gen Z is constantly exposed to influencers and peers showcasing aspirational lifestyles. What’s often overlooked is that influencers are outliers, and much of the content they share is either sponsored or curated to portray an idealized version of life,” Peng said.

She added, “This creates a ‘keeping up with the Joneses’ effect, where young people feel the need to match the consumption patterns they see online, often leading to overspending or financial stress. Social media also amplifies financial anxiety, as curated posts from peers can create unrealistic comparisons, compounding pressure to achieve a similar lifestyle.”

This report is far from the only alarm sounding when it comes to Gen Zers and their finances.

A recent poll by Talker Research for Newsweek showed that Gen Z had the highest average personal debt when compared to older groups. Gen Z’s average personal debt was already at $94,101, significantly higher than that of millennials ($59,181) and Gen X ($53,255).

A recent survey from Savings.com found that half of U.S. parents are still financially supporting their adult Gen Z and millennial children.

Step’s survey highlighted a similar pattern when it comes to young people relying on the bank of mom and dad, reporting that when money runs out before payday, 28 percent turn to their family or friends for help.

In an email shared with Newsweek, Step’s CEO CJ MacDonald said “What this means for Gen Z is simple: without tools that meet them where they are and grow with them, we risk an entire generation being locked out of wealth-building opportunities before they even begin.”

“We need to do more to help this group and set them up for success,” MacDonald said.

Peng, meanwhile, told Newsweek that in order to address these challenges, there needs to be “both structural reforms and a revamped approach to financial education.” She pointed to reforms like affordable education, housing and health care access.

Peng also said that a “modernized financial education curriculum,” should be emphasizing “budgeting and saving, understanding debt, recognizing social medias role and coping with financial stress.”

A series of recessions and economic crises, including the Great Recession of 2008 and the COVID-19 pandemic, in Gen Z’s formative years has made it harder for them to accumulate a stabilizing amount of wealth, or the type necessary for crucial life milestones.

And the current economic outlook is rocky. Fears of a stock market crash are bubbling, according to a report by predictive consumer data company Resonate. Meanwhile, the Conference Board’s latest Leading Economic Index (LEI) indicates that the economic outlook is continuing to deteriorate, despite some positive developments.

What People Are Saying

Step CEO CJ MacDonald, in an email shared with Newsweek: “This is one of the toughest financial moments Gen Z has faced — they’re juggling student loan repayments, rising living costs, and now Buy Now Pay Later programs that could quietly damage their credit without any new requirements to educate them around the impact this can have and how to avoid the pitfalls. Traditional systems aren’t just outdated — they’re undermining and praying on a generation trying to get on stable financial ground.”

Professor Lin Peng, in an email shared with Newsweek: “Gen Z’s financial instability stems from a combination of structural economic challenges and social factors like consumerism fueled by social media. Addressing these issues requires a two-pronged approach: structural reforms to reduce the cost of living, alongside practical, modernized financial education that prepares young people for today’s financial realities.”