The pandemic lockdown provided many with the opportunity to cut spending, save money, and reallocate funds toward homeownership. Federal stimulus helped these efforts. However, millennials still face a long road to catch up with prior generations on home ownership due to student and medical debt, labor market fluctuations, housing markets, and financial conditions. Millennials still have a lower homeownership rate than the national average for all age groups, with only 50 of them agreeing that the sharing economy improves the American economy as a whole.
The Great Recession of 2008 was hard on American incomes, especially for young Millennials (born between 1980 and 1994). A significant share of millennials have yet to mature into homeownership, as many have not reached life stages that typically prompt a desire to own a home or find it. This article discusses the future of homeownership in the United States given the financial constraints young adults, especially blacks and Latinos, face when they try to find it.
As the cost of homeownership increases, more young adults are turning to co-buying homes with friends or moving into multi-generational living arrangements. At about 80 million strong, millennials currently make up the largest share of homebuyers in the US. Parental wealth can have a direct impact on a young adult’s financial ability to own a home, especially in terms of down payment.
Most Gen Zers and millennials really do want to own a home someday, if not right now. Their biggest roadblock is affordability, and if customers keep demanding more, they can send materials to teach them how to become a better host.
📹 How Gen Z Is Buying Homes Younger Than Millennials And Boomers Did
In 2023, Gen Z led in homeownership among young adults, with a higher rate of homeownership at age 24 compared to …
What is the financial situation of Millennials?
The 2019 U. S. Financial Health Pulse consumer survey revealed that only 24% of Millennials are financially healthy, indicating a lack of resilience in spending, saving, borrowing, and planning to navigate unexpected events and pursue opportunities over time.
What do Millennials believe about economic policy?
Millennials are more likely than older adults to support an expanded government social safety net and rate economic inequality as a major problem in the U. S. Last year, 69% of Millennials said the nation’s economic system unfairly favors powerful interests, the highest share of any generation. However, this does not mean that most Millennials are ready to embrace socialism and abandon capitalism. The data suggests that Millennials are not clamoring for socialism, but rather an economy that works better and more fairly for them. Socialism may be having a moment in America right now.
What is the economic inequality of millennials?
A study reveals that despite the challenges faced by millennials, such as student debt, low-wage service jobs, unaffordable housing, and low savings, the millennial elite is outperforming previous generations. The average millennial has 30 less wealth at the age of 35 than baby boomers at the same age, while the top 10 of millennials have 20 more wealth than baby boomers at the same age. The study highlights the unique differences among millennials, with some doing exceptionally well, such as Mark Zuckerberg and Sam Altman, while others struggle. Millennials, typically aged 28-43, have faced financial headwinds, including lower homeownership rates, larger debts, unstable jobs, and lower rates of dual-income family formation.
What is the biggest challenge of millennials?
Millennials, born between 1981 and 1996, are a generation of individuals who have experienced numerous challenges and struggles. Some of the most common challenges include cancel culture, college debt, aging parents, discrimination, substance/alcohol/sex addiction, violence/bullying, less human interaction, and mental health issues. Despite the advanced and sophisticated society they live in, millennials still find ways to make a name for themselves, despite facing criticism and judgment.
They must withstand criticism and judgment to prove their worth and achieve success. Common challenges among millennials include cancel culture, college debt, aging parents, discrimination, substance/alcohol/sex addiction, violence/bullying, less human interaction, and mental health issues. By overcoming these challenges, millennials can demonstrate their worth and success in today’s society.
Do millennials really care about sustainability?
Gen Z and millennials are increasingly conscious about sustainability, with 94 and 93 of these groups being sustainably driven, according to a report by GlobeScan. The reason for their environmental and sustainability consciousness is attributed to feelings of shame about living in an environmentally unfriendly way, as well as economic and environmental challenges such as climate change and the cost-of-living crisis.
These generations are more likely to incorporate sustainability into their daily lives and change their lifestyles to be more environmentally driven, leading to them dominating the market as green consumers, particularly in the food industry.
What might be Millennials’ greatest economic concerns?
Millennials, who entered the workforce after the Great Recession, face high unemployment and underemployment rates, with 8. 8% and 18. 3% respectively. Wages for employed Millennials have dropped 7. 6% since the recession, making it difficult for them to pay off their record-high student loan debt. Loan default rates are approaching historic highs, damaging Millennial credit scores.
Socially, millennial marriage and family formation trends differ from past generations. The average age of first marriage in the US is now 27 for women and 29 for men, up from 23 for women and 26 for men in 1990. The total fertility rate is 1. 93 among Millennials, compared to 2. 1 for Generation X. These trends are closely related to cultural changes, including more women in the workforce, higher education, and greater acceptance of premarital sex, birth control, and cohabitation before marriage.
What are millennials most concerned about?
Millennials are passionate about various social issues, including climate change, environmental protection, affordable healthcare, equal access to healthcare, immigration reform, and increased diversity. They are also passionate about sustainability, social justice, and economic equality. They are also passionate about technology and staying updated with trends. Millennials seek unique, creative, and edgy experiences that are immersive, interactive, and offer a sense of adventure and exploration.
They also want experiences that allow them to learn, grow, and build meaningful connections with others. They enjoy attending concerts, festivals, and hiking trips. Their interests are evident in their social media presence.
What is the most important thing to millennials?
Millennials, the current largest active generation, value collaboration, human interactions, and teamwork. They enjoy working as a team, connecting with colleagues, sharing experiences, and learning new skills. These values are influenced by unique traits and characters, such as enjoying human interactions and constant learning. As a result, Millennials value teamwork and collaborative projects. Understanding what matters most to Gen Y is essential for attracting, retaining, and making this generation thrive in the workplace.
Millennials’ values are influenced by their unique traits and characters, such as enjoying human interactions and constant learning. By understanding what Millennials care about, businesses can better cater to their needs and create a more productive and successful workforce.
How Gen Z and millennials differ financially?
Despite facing higher costs than millennials at the same age, Gen Z maintains more cautious spending habits, according to Ryan, who posits that financial maturity often comes with age, with long-term planning becoming a priority.
Which generation is the most eco-friendly?
Reports indicate that Gen Z in the United States is more concerned about sustainability than older generations, with 37 of them stating climate change as their top personal concern. This generation is at the forefront of climate action. Additionally, Gen Z consumers are more likely to pay 10 more for sustainable products than Millennials and Baby Boomers. A 2023 study found that 68 of sustainable apparel revenue in the US in 2022 came from Gen Z and Millenials combined. While some Baby Boomers may be doing their part, overall, the reports suggest that Gen Z is more concerned about sustainability than previous generations.
Are 90% of millennials interested in pursuing sustainable investments?
Millennial investors have shown a significant increase in their investment habits towards sustainable funds, with a total of $69. 2 billion invested in 2021, up from $51. 1 billion in the previous year. This is a significant improvement from the previous year’s $5 billion. Morgan Stanely also found that 90% of Millennials were interested in sustainable investments. However, Generation Z, born between 1997 and 2012, is also focusing on sustainable investment efforts, supporting companies with existing ESG efforts and aligning their funds with personal values.
A survey by U. S. Bank found that nearly two-thirds of Gen Z investors are more open to allocating their portfolios towards causes they care about. Interestingly, only 19 of Millennials are making investment decisions based on ESG factors, while 16 of Gen X and 2 of Baby Boomers exclusively consider ESG factors when making trades or funding their portfolios.
📹 Gen Z Is Giving Up On Their Financial Future
In this video, I’m breaking down the truth about the economy, how Gen Z is feeling about it, and then give you 3 easy steps to get …
I have had the privilege of working closely with Michael Hugh Terpin on several occasions, and each time, I have been immensely impressed by his deep understanding of the crypto market dynamics. His ability to analyze trends, assess risks, and make informed decisions has consistently yielded exceptional results.
in my opinion, housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living
I’m skeptical about the news that Gen Z is driving the housing market. It’s more likely that their parents are the ones buying homes. I’m actually hoping for a housing crisis in 2025, so I can snag some affordable properties after selling off some of my own. I’m also considering investing in stocks as a backup plan. Does anyone have insights on the best timing for these moves? I’ve made some good profits from trading, but I’m concerned about market volatility and the risk of a dead cat bounce. Can someone explain why this market phenomenon occurs?”
This appears to be somewhat questionable news. It’s more likely that Gen Z isn’t the primary group buying homes; it’s probably their parents. I’m eagerly anticipating a potential housing crisis to snag some affordable properties after selling off some in 2025. I’m also thinking about diving into stocks as a backup plan. Any thoughts on the ideal timing for these moves? I’ve made some good profits from trading, but I’m a bit worried about market instability and the possibility of a dead cat bounce. Can you shed some light on why this market phenomenon happens?
What a bogus report. How can you say Gen Zs are buying homes when you’re only speaking about a tiny percentage of them? Not only that you also say genz has more debt, suffering from inflation, and suffering from an inflated home market. I am a lucky millennial who purchased a home when I was 26. 3 years later it doubled in price. No way I could afford my house at today’s price. So much BS in this article.
What a ridiculous analysis. Focusing on a 21 year old kid who bought a home at sub 3% is a UNICORN, not the norm. Younger people are now willing to accept that they can either rent forever or sign for 30 years of debt. The low interest rates of covered were just luck for anyone who bought during the time.
Grandparents or rich parents. I’m not knocking it, because I’d want my kids to be well off as well. I just wish a lot of people would quit pretending they got it out the “dirt” or worked harder than everyone to get a home. It’s like lying about working out, diet and such when you were just getting ozempic and HGH off your parents insurance. Be honest.
Gen z is 1997-2012. That means they’re age 27-12. I highly doubt at even 27 which is the oldest gen z was able to Afford 10-20% down payment in current market. I know there’s select few who did well and hats off to them. But majority I highly doubt it. Research more and I bet most if not all have their parents co signed or better yet as owners.
I guess CNBC didn’t look at all the Tik Tok articles of Gen Z women who bought homes and now are selling them to move back into apartments because they were not aware of all the costs associated with home ownership and would rather have a landlord take care of problems that arise rather than themselves.
I feel sorry for people who thinks owning a home always leads to success stories. Index funds are proven that it provides higher returns than owning a home with a ton of phantom costs, unlimited trips to Home Depot, etc. your mortgage is the minimum you’ll pay. I rent and if there’s any issues, I text my landlord. Rent is the maximum I pay. 20%-25% of my income goes to the stock market. All my friends who own a home don’t have money to travel and enjoy life. What’s the point of living if you can’t enjoy it because you’re house poor?
I’ll say I am 32 and bought my first house in 2015 at 23 years old. There is no way I would be able to buy a house if I was 23 in 2024. I paid $208k for my first house that is now worth $480k. It’s all about timing and luck and Gen Z is getting screwed in the housing market. Single family home ownership will be a luxury for the rich and for those who bought in at the right time.
As a millennial I do believe this. Many millennials have been laid off not once, but twice. Many of us graduated after the 2008 financial crisis and struggled to find work. We accumulated debt and couldn’t find jobs in our fields. Jump 10-15 years, and the job market is great for these younger people that are making the same or more than we are because they graduated at the right time.
As a gen Z getting my first home, I would not have done it without joining the military and receive the VA loan, as one of the biggest hurdle was to saving up for a 20% down payment. I Also happen to live in a state that home prices are relatively cheaper than other states and major cities as that one of the big factor on how I can afford a home.
I’m a 21 year old Gen Z first time homebuyer 🏡 I did it alone and no my parents didn’t help a penny/cosign. I graduated from college worked on my credit since freshman year and worked 30 while fully enrolled in college. While my interest rates is 7.3% I think it’s still worth the investment in 10+ years. I plan on rebuying next election when interest rates are low like records show again and again.. edit some how loan providers will consider college education as a “career” but 100% finance is my only downfall….
I think part of this is that we as Gen Z have seen how bad it’s been for the millennials and thus we started planning earlier. Saving, investing and budgeting are more commonplace to talk about now than in the early 2000s when the millennials were our age due to the internet you can see financial advice everywhere.
This makes total sense. The median aged Gen X-er came into the labor force literally right at the lowest adjusted for inflation wages since the Great Depression, all time high labor force participation rate (very crowed), and during an era of modestly high interest rates. Also, Gen X’s late Silent and Baby Boomer parents didn’t help them for sh8t. The Millennial story is one of voluntary self destruction, in where they simply refused to become adults and delayed entering the workforce more than any generation ever (or since, since Gen Z is blowing Millennials away in teen/20’s labor force participation rates. Gen Z thus far has come into the labor force at all time high adjusted for inflation wages, very low labor for participation rates, and during an area of very low to modestly low interest rates. Both Millennials and Gen Z had/have far, far more supportive parents than Gen X, which were treated like a bunch of unwanted, feral children.
People claim housing is unaffordable, but if you compare median house prices to median incomes, houses are not historically that expensive. Yes, house prices have gone up, but wages have too. People have a hard time thinking in inflationary terms, fiat currency inflates, so prices relative to the past are inaccurate, because so are wages.
2021 was a blip on the graph, pretty sure we’ll see a trend toward less and less individual home ownership per each generation going forward if things don’t change as you’re pretty much reliant on whether or not a bank is willing to lend to you, and they’re getting less willing to do so when they could instead just invest that money in real-estate directly. Why lend you the money and let you buy the house when they can just buy it themselves and make you pay rent? Also predicting that a population crash is coming, because people are going to start making choices between marriage, home ownership, and kids, you won’t be able to afford all three. My bet is kids and marriage will be the ones more people will choose to put off or do without completely more often than choosing to never own a home.
@CNBC 9:31 $15K vs $20K 1992 vs now is approx 1.1% non-compounded annual increase. That doesn’t even beat inflation over that time! I don’t know what things were like in 1992 but $15K in 1992 def has way more purchasing power than $20K today. Given $100K ten years ago would need to be at least $160-180K today depending on where one lives to be equivalent. Smh. Bad reporting with the reality.
My husband and I bought our first home on March 25th, 2020 for $120,000 at the ages of 26 and 28 (making us younger millennials). We’d been married for six years, had an income of around $40k, combined student debt of around $80k, and were expecting our second child. We got no help from family with the down payment or co-signing, though we had lived with my parents and his at different times to save money on rent (we always payed rent, even when living with our parents). We did take advantage of a government program that helped us with our down payment, and the seller was self-representing and favored us over other offers because we knew them personally. Our rate is 3.65%, and our monthly payment is lower than any rent we’ve ever paid. Our 3-bedroom house is now valued at close to $300k. It’s our only asset and we are forever grateful that we broke into the market when we did—one week before the shutdown.
Buying an old, poorly maintained dump just so you can call yourself a homeowner sounds like a terrible idea. The cherry on top is being welded to a neighborhood that probably isn’t the best either. Don’t buy a home when you’re broke. “Buying a home was cheaper than renting in my area”. Yea cause you don’t factor in the closing cost and (big one) maintenance. Especially when you’re buying a “cheap” broke down junker.
im 33 now. bought my home in 2020 right at the start of the pandemic when i moved from CA to Oregon for work. I wasn’t sure if id be able to get into the market but i barely was able to. 4-5 years later still living in this house with a low interest rate. i would love to maybe find the next home and move from my starter home, but at the same time, im not going to risk tripling my interest rate and adding what… 2,000 alone in interest payments monthly for a bigger house. it was a huge risk doing, it but im glad i toook it and it paid off 🙂 no my parents or family did not help, used my own money to put downpayment which i barely had enough
Meanwhile, I’m a millennial living with my mom because the “affordable” housing options in my area are limited to : condos with huge HOA fees on top of the monthly mortgage, houses that need extensive rehab just to bring them up to housing code compliance, or trailers that come with a $1600 a month lot fee on top of the $400 a month mortgage. At this point, renting is the most affordable option but it’s also the least secure unless you luck out and can get a housing voucher.
I’m a first generation immigrant and I don’t have any parents or grandparents that can help me financially. I don’t have anyone to co-sign me and I don’t have any assets or wills when any family passes. I literally just have myself I have been working every day since I left high school and I still cannot afford a home it’s really frustrating. From what I’ve seen people in my age group are home owners because their parents co-signed them, gave them the down payment or grandparents left them a will. I haven’t seen anyone in my age group just working like me purchase a home it’s just not happening.
This article has several inconsistencies. At some points “median” is being compared to “average”. Other times “first-time homeowner” is a misleading term being used in the context of the article. While I understand “first-time homeowner” is just an industry term used primarily to qualify for various programs and doesn’t necessarily mean that the individual is literally buying their first home, it’s not useful for the topic of this article. A more appropriate survey of true first time homeowners would be more appropriate. Usually CNBC has great articles and this wasn’t awful by any means but some elements were a little flawed in logic.
I’m 26 and looking home to buy. I don’t think it is because the economy is good that younger people can own homes. I noticed that a lot of people my age still lives with their parents after college, including myself. We have more savings just because of that. One of my friend lives with her mom, she paid rent to her mom but not as expensive as the market rate for one bedroom or studio apartment. And quite honestly, mortgage is sometime cheaper than renting. Especially if you have more housemate paying. So we are shifting from individually, getting started in life and owning a house. To having a bit of help from our family due to the economics hardship, and we just get some headstart like that.
Housing is extremely regional. The NAR Deputy Chief Economist is wrong regarding inventory in many sought after areas. The crash has already started. There are price corrections occurring in huge numbers. Couple that with declines in the workforce, declines in compensation, declines in childbirths, expected long-term elevated interest rates, and the coming silver tsunami, homes are destined to be more affordable in the future. Fiscally, without the help of parents or other programs, it is not wise to purchase if one expects it to be a “good investment”.
Nearly 75% of Gen Z plan to buy a home within the next 6 years.” What a meaningless poll. When we’re young, most of us have big dreams, like becoming millionaires within a few years, but that doesn’t mean much in reality. Aspirations don’t always align with financial capability or market conditions, especially with rising home prices and economic uncertainty. It’s easy to set lofty goals, but the true test is in navigating the practical challenges that come with achieving them.
home ownership was sooooo tough for me as a millennial. i graduated from college in may 2008. not great timing. yes prices were low but most people my age had zero capital. i managed to succeed in real estate investing but i know many friends from the early 2010s that have never recovered financially from that…
Buying a home early in 20s limits career mobility. Not saying it’s a bad investment but the prices are so high for homes near major metropolitan areas and unless parents are buying it or helping with the purchase you don’t want to be stuck in the wrong location. Don’t bank on WFH, already most of the remote jobs need folks that can come into the office as needed, 2-3x office per week, or in the same timezone.
I sware they release these articles as economic propaganda. So this kid as a freshman in college decides it’s cheaper to buy a home than to live on campus. What false reality are you trying to push!? A $40,000 down payment on a home at 19 years old? Not one 19 year old has that money unless there parent pays for it.
What is messed up is he said it was cheaper to buy a home than to rent a dorm room from a college. What I wonder is where are thier parents getting this money as statistically they have not saved for retirement. What all this suggests is a return to multigenerational living where three generations live in a house, like the rest of the world does.
One thing I never understand is why these studies never factor in social media????!!! Like dude, just imagine if the way social media is today was the same 15-20 years ago (we are getting old 😮💨😅) things would’ve been very different. All we had was Donald trump’s trump academy and rich dad poor dad to encourage us to get into realestate. A large amount of millennials didn’t have parents who were home owners as well, so where were we going to get the advice from??? Social media and having tons of access to learn from others on the fly, and for free, is a huge benefit in so many ways. Plus when we were younger rent prices weren’t as predatory as they are today. So while Gen z are learning these things younger, the older generations are being taught the importance of building generational wealth as soon as possible. Which was not a conversation for our parents back when we were younger.
While things are really hard including for myself, let’s appreciate the entrepreneurial opportunities the online and digital space has grown to provide for us. We can literally say anyone can do almost anything they want with the most basic learning method being courses and YouTube learning so anyone can start almost anything in craft, wholesale, ecommerce, storefront, B2B, B2C, software, consulting + more fields with growth and opportunities. I’m really thankful for that, let’s please be honest about that and realize no matter how low we may get we can restart with a little help, just gotta want to research and help yourself to information that can start you off with operating something simple of your own and growing it into a working business. I think the key to surging the tech modern world is everyone should create and work on something for themselves that will have potential to be magnificent. & don’t sell yourself short, it’s okay to start working towards your biggest happy place of a dream right now. Write it down, what steps can you take now that flows into more progressive steps to achieve your dreams? K bye :).
I’m 30 and I bought my house at 29 (in California) 1 month before my 30th birthday. Price was right under 1m. There is absolutely no way this could be achieved by a gen Z without money from parents. It took me 5 years of savings and then a very high and stable income job to keep the house lol cause the hard part is not just getting it but keeping up with the payment and the expenses (my power bill is $500 a month. Property tax is $850 a month) etc. Ridiculous era we live in.
Gen Z myself, ‘bought’ a 800sqft 2bdrm condo in Toronto under my name while down payment from my maternal grandparents, and my mom is helping with mortgage cuz the interest rate is so high and even a decent full time job can’t cover it let along the car, management fee and grocery. All other gen Z I knew who owned homes were in similar situations; their middle age parents paid the down payment or everything while the kid struggles to keep up the monthly payment…I was lucky to be the only child (otherwise my sibling would be so mad) and family being so supportive, but owning homes is still so difficult especially in large cities recently…
Don’t get me wrong it’s hard, but I went to trade school when I was 18 and started working. I lived with my mom, saved everything I made and saved up about $90K. I’m 24 and I finally bought a house. I admit I have the huge advantage of living in Oklahoma where property is the fraction of the price of other places.
This article and the title are misleading. They are talking about ppl in Gen Z buying homes 2-4 years ago and then right at the end say “in 2023 Gen-Z ownership stagnated.” You could say we were doing it then, it’s not happening now. I have a friend that bought a cheap house, they “own” a home, but they are also doing a LOT of maintenance and restoration.
Such a dishonest report. Spoiled college student says a mortgage made sense as an unskilled college student pursuing career certification because Mom and Dad are going to co-sign and foot the bill until he’s gainfully employed and creditworthy. Everyone his age would make this choice if they had it available.
I am in my early 30s and this is what I have noticed. Millennials are more extroverted than gen z. Therefore, a good amount of millennials liked to travel and go out more which can be costly while gen Z tends to be more of a home body. Personally, I see nothing wrong with either choice. What I do see though is that you have the trade offs for buying a home in your twenties. As for my personal choices, I did put off buying a home until I was in my late twenties. So this was a few years ago for me and I would like to point out that it was condo. On the flip side though, I got to see a lot of the U.S. when I did not have a home and right now I am renting out my condo as I work abroad in other countries.
I clicked on this article because right off the bat I knew this was going to be misinformation. I was not disappointed. With today’s home prices, the younger generation’s best bet is to inherit their homes from their relatives, mainly the parents. Even starter homes are out of budget for most people even with a 6 figure income. Prices definitely vary by location, that’s a given.
I think we’re seeing a K shaped growth in Gen Z wealth. Those who didn’t take on much debt and had the support, income, or unique opportunity are the ones that are hitting the headlines with the “success”, while the rest are fish in a barrel with soaring inflation, tough labor market, and increasing debt
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I can speak at least of my group that is all Gen Z. We are prioritizing staying at home, paying off student loans and saving money, and pumping money into the stock market. Interest rates are poor and we understand staying at home, when possible, is advantageous for us to save long term. Additionally, lots of us remember the Great Recession and the impact it had on our parents, causing us to be less loyal to employers and prioritize greater work life balance
As an individual in Gen Z, who has had the blessed privilege of no debt and being able to save from home for 2+ years and is also budgeting and frugal and in the midwest and I still can’t even come close to the bids. (Long run on sentence). This article is very inaccurate. Even for those who are privileged.
With what credit, with what down payment, and with what good paying job to pay off? Also who was paying for his school. I got doubt someone slightly younger than me can do this without massive support from their family, while in college. Yeah right, this is full of crap. 🧢🧢🧢🧢 Dada is making money renting out to their son. Their sons name might be on it, but it wasnt his money guaranteed. Its called the wealthy are doing absolutely fantastic, so their kids get houses as well as everything else.
the data isn’t so far off. i purchased a 3 flat in chicago at the age of 23 im 24 now and I didn’t have a co signer i as well still live with my parents due to the fact the 3 flat is rented out with section 8 tenants allowing me to generate well over 1k a month in rental income. i would say my biggest help/support was my credit at the time being 740 and i had two jobs helping me generate around 85k before taxes
I’m a millennial. What helps me snap out of the doom and gloom is to remember that my immigrant grandparents survived actual poverty and a real depression (not just recession) and world wars. Several of their siblings didn’t survive childhood. Yes, we might not be the luckiest generation, but we certainly aren’t the unluckiest.
It’s not just Gen Z who have this spend send spend, also their parents’ generation behave that way. My friends each added up our salaries over our entire working life and tried figure out where it all got spent. Shocking! – Every single person had earned over $1m, but most had no idea where it went, have no homeownership to show for it, no real pension savings or investments. The attitude of “money is for spending not saving” is way larger than “Gen Z”
My millennial ass was previously in the camp of “gloom and doom,” especially during the financial crisis of 2008. But after stumbling onto Ramit’s Netflix series, podcasts, book and youtube vids, I got a much better education on money than I received from anyone else. I have paid off two-thirds of my debt, opened a brokerage account and invested in it monthly, and am doing a much better job managing my money than I have ever done. My biggest mistake was not finding this information before buying a condo. Knowing what I know now, I will be getting rid of it soon and using these high ass mortgage payments for things I LOVE.
Thank you Ramit for saying this! I’m 24 and came from a lower income family. I’ve also been chronically ill since I was 15, so my life has taken a considerably different path than my peers. However, I made a decision when I was a teenager that I would NOT succumb to the doomsday attitude and would do everything in my power to break the generational cycles of an impoverished mindset. My motto is “where there’s a will, there’s a way” and that’s what I live by. We are blessed to live in the age of the internet where one of the most powerful things, knowledge, is literally in our pockets. On the other hand, it’s easier than ever to fall into the “doom” mentality because of it. But I make a decision daily to set myself up for peace and prosperity, so I can share it with my posterity and give others the gift of a “rich life”. ❤
Gen z here 👋🏾 Ramit is the only person with a article with this subject I would eagerly click on, because I know he’s going to spare us the bullshit and be understanding. The hopelessness people are feeling is so severe. Even gen alpha is being effected. A lot of people are so deep in the doom vortex and it’s been building up for years and years, especially post pandemic. I feel many young people spend as a manifestation of self harm, and with an almost suicidal mindset. I talk to a lot of people who believe the world is only going to get worse and worse. I’m optimistic by nature, but for a long time I had a lot of trouble even beginning to imagine myself in the future, and just trying to get through every day.
I don’t know about the rest of America, but in NYC the real estate market crash between 1991-1997. I was relatively young, and was able to buy my very own 1-bedroom apartment in cash. Between the maintenance and utilities, I was paying approximately $550-600 a month. Rent for a studio was $650 or so at that time. The moral is, save your money and grab the opportunity when it comes your way. Also, have emergency funds to buffer any layoffs, so you won’t be homeless.
I started working 2 years ago, and thankfully I have a dad that paid for my college and I have a job that pays me almost $200k right out of college. But I have friends that do not have this fortune, and I empathize with their feeling honestly. Lots of college debt because university keeps getting more and more expensive than it’s ever been, stagnant wages, very expensive living amenities… I’m in a very fortunate minority for my age group, but when your choice is either to live like a rat to save a decent amount of money, or live paycheck to paycheck to have a NORMAL life, I honestly don’t blame people for wanting to have a normal life. Cost of living has gotten out of control and wages have not kept up with it, we need to make the economy so that the average person can have a normal life with a good standard of living, that in my opinion is the bare minimum
Decelerating inflation doesn’t equal prices coming down, it simply means inflation is growing slower. You glossed over that rapid acceleration from 2020-2022, so if you were to look over the last 4 years, costs have outpaced wages significantly. If you were to extend that over the last 20 years, it’s a lot worse. Which means most Americans don’t have enough disposable income to make investments in the stock market and hence feel like this is the worst economy ever as you framed it. Instead of looking at eggs and lumber, look at housing and education costs, that is where the bulk of expenses go.
I’m 25 and live with my family and I have to admit, even with me making above average in my state that it is possible to live the American dream Gen Z, you just have to be wiser than the previous generations, our purchasing power has been destroyed, my grandfather paid $30K for his house and made $32K that year my dad paid $80K for a 3 bedroom house with a basement and made $38,000 that year. Now I make $60K and the average house in my city cost $300K. We are not lazy we just don’t have the purchasing power the older generations had. The government endlessly prints money, which also artificially inflates assets like housing. Lastly, 60% of Americans live check to (about 200 million people) I agree that it’s possible to make it and buy a house but Gen Z will literally have to live at home and save for 5 – 10 years and hope inflation stays low if they want a chance at buying a home. (Those who’s parents didn’t buy them a house, about one third of Gen Z will have family gifting them money for a house)
Me and my Roomates (all around 26 years old) are all exactly what you’re talking about, we immediately send half our paychecks to investments which are nearing 6 figures, all have built up emergency funds of around 20k, and can still very much enjoy our lives. Yeah it sucks our generation is getting screwed but we’ve all accepted it and done the best we can to build our lives up and because of it we feel so far ahead. 10/10 would recommend only worrying about what you can control
Having a difficult time squaring away how home price is 6X annual income (up from 2.5X 40 years ago) and the things can be good and bad at the same time, then saying wages are up…. The fact that wages are going up at a slower pace than housing means there’s less discretionary funds for guilt free spending… real or not probably depends on your socio economic class. With that said, all 3 tips are great! Thanks!
A useful comparison is my brother and I. Both early 40’s. He has earnt more than me most of his career. He also moaned for 15yrs about buying a house being impossible and mocking me for a more financially respinsible lifestyle. I am now almost mortgage free on two houses. He has a huge mortgage on one. This is just to say building some wealth could be as easy as taking your head out of the sand and making a plan
I’m living in Russia and things kinda sucks more. Average salary is about 30000-40000 rubles(it is less than 500$/month). But the most cheap 1-room apartment costs at least 3m rubles (37000$) I just can’t imagine how i can afford my own place. Renting a room costs 200$/month at least, plus bills, food, internet… I’m working to live, not to have fun 🙁
bought a house in 2014 that cost 2X my gross annual income. with 0 down and 3.8 APR, it took me 6 years to paid it off. that same house now worth 2X its 2014 value. although my salary is more than 2X of what it was in 2014, I don’t think I can paid off the mortgage of similar house in 6 years if i buy it tomorrow. Everything is much more expensive now. I’m very concern for my kids’ future!
That thumbnail went crazy 🔥very important insights, its something ive noticed so much with my friends and makes it kind of hard to have more optimistic conversations with them, youve inspire me alot with my website to spread more positive and accurate education while also empathizing and acknowledging the struggles that exist, things can be good and bad at the same time
You are right it was unaffordable in the 80s. We made it through. 15% interest was scary. As a boomer that is when my husband and i bought our first house. He was a utility worker and I was a stay at home wife with 2 kids. We had another kid after that. That is the period of time us boomers are referring to. Inflation and unemployment were also high. Every generation has obstacles. My grandson and his stay at home wife (both 26) just moved into the home they bought with the two children. He is a barber. We boomer know the economy sucks right now. You should actually talk to some average retired boomers.
Thank you so much for this! It’s actually terrifying that so many people are deciding to just lay down and suffer. Especially if you’re younger, you have the most valuable asset, time! If you give up, what are you going to do for the rest of your life? Do nothing to try to make your situation better, suffer and complain the whole time? It’s a self fulfilling prophecy. On the topic of the addiction to doom, I think people mistake being “well informed” with being tapped in to every horrible thing happening in every corner of the world at every minute they’re awake. We were never built to have access to so much information at any given time.
Our 3 kids are Gen Z and we teach them to save first, spend second. 2 of our kids listen and live that way… the other well it’s spend spend spend to keep up with peers. Peer influence is extremely hard, especially when kids are buying coach, gucci, etc. Thus it’s important to save to be able to just survive as housing, insurance and food will continue to rise like crazy.
Gen Z here. Things are very tough I’ll have to admit. But I have two options – sitting and complaining or getting up and doing something. Sitting and complaining won’t change anything and will only hold me back. So yes I’ll have to work harder. My generation will have it harder than the boomers, but that’s the reality to live with. I think the best way to go right now is to rack up on certifications if you’re going for a certain field and to also learn how to invest. It may not be everything but definitely helps and has helped me so far.
Yeah I think this is just because they’re young. 😅 I thought exactly the same in my 20’s. It wasn’t until about age 28-30 that I started to take my life seriously. It’s just being human. (Edit: and of course there’s exceptions to this! There are young people who take their finances seriously. I’m just painting in broad brushstrokes. This of course does not represent every person in a certain age demographic)
Step 1: Get at least 100% match on your 401k. Step 2: Get an emergency fund for at least 3 months. Step 3: Pay off all high interest debt, if possible, sell your expensive car and get a cheaper reliable vehicle (if possible) Negative equity may make that harder, in which case pay your car down to market value and sell it! Step 4: if you over 40 like me, save 25% or more in 401k, IRA, combination of both, and invest in stocks. Step 5: Pay off your home, if your fortunate to own one!!
On paper making more than I ever have but the take home is roughly the same amount due to health insurance costs. My house is worth triple but my homeowners insurance and property tax doubled in the past two years. I was able to save more at a lower income threshold before. Who cares if you make more if the government just takes more in taxes? 401k is great but that doesn’t really help me in the day to day 🤷 It is the lack of real progress that is depressing. I think that is why people feel frustrated economically.
Uk person here, my mum is now earning less than what she was 10 years ago because her wage has not actually gone up with the minimum wage. So inflation is affecting us massively. And while minimum wage is up, is not matching inflation either… Can’t even rent and i don’t go on holiday, don’t have a car, don’t buy clothes every week and i save monthly. call me a doomer but im 26 and can’t afford to live in my own home or rent because rent is ridiculous here because they know we can’t buy the houses.
I’m Gen Z (20f) working full time and going to college full time. I make a little under 40k a year. I thought everything was hopeless this year when I had to cancel my vacation plans due to not having enough money. Social media also is depressing 24/7. My eyes were opened when I took a Consumer Math class and watched Clearvalue Tax’s article on 4 things to do when you get paid. Many people around me are under the impression that just cutting back on everything and saving money with low or no interest is the way to go but it is not.
Honestly people came to the realization that slaving away your whole life just to “enjoy” the WORST 10-20 years of your life. You can’t enjoy driving a porche when you can’t see the road. Can’t enjoy a vacation to Tahiti if you can’t walk or are having problems breathing. There’s a lot of life that you can’t enjoy when your old that the younger version of you would have greatly enjoyed that comes with stories to tell.
Gen Z is just spoiled as hell, and have no idea what real poverty is or what being poor feels like. Most of them complaining they don’t have money is because they are simply buying way more things than people did 40 years or even 20 years ago. Back then, you only had, at most, 1 luxury you paid for on a monthly basis and that was cable TV, and very few luxury purchases besides a TV or VCR. Now? Netflix, cellphones, amazon prime. Thousand dollar cellphones, and 100 dollar phone plans, along with internet as well. Then there’s the vanity shopping like luxury goods and etc. Most of the things in the consumer basket that we have now… didn’t even exist 40 years ago (almost 30% of today’s basket of goods was added in the past 10 years). The only single thing that has actually gotten more expensive is buying a house. Stop buying crap you can’t afford, and you’ll be fine. And if you still can’t afford it, maybe its time to move somewhere that you can. No one is forcing you to live in NY city, in an apartment with 3 room mates, and spending 90% of your 100K a year salary on just necessities. Maybe, take a 30K a year pay cut, move to a cheaper state, and end up spending 40% of your salary on necessities. I’m sorry, but most Gen Z is just plain spoiled by growing up in what their parent’s generation would have considered as luxuries, and taking it for granted.
Your take on “but minimum wage jobs/pay are increasing much more than higher wage jobs” is so stupid, I don’t know where to begin. The people working those low wage jobs are already far under a “livable wage”, so a $3/hr increase or whatever doesn’t come closing to covering the large increase in housing, education, healthcare, etc. relative to wages a few decades ago.
I’m a young Millenial but too old to be a Gen Z and what really helped me is getting off social media, the less you see people faking their lives, the less you will compare yourself to others. I use to watch makeup and clothes hauls in the mid 2010s and racked up a lot of debt but since I made a social media detox, I’m on my way to be debt free 🎉
The thing I don’t understand is people expect to be able to afford the “average” priced house for their first home. Keep in mind, average means it’s more expensive than ~50% of the other homes. Wouldn’t you think it would be wise would buy a starter home? A starter home (1-2k sq ft) is not $400k in most of the country.
I work hard that is a fact . My hours got cut to 15, from working 50 to 60 hours a week they also have me working a 3 persons job solo. They want to promote me but it’s part time position . So I decided to learn welding . The company I’m trying to work for the hours are consistent however they want you to work 50 to 60 a week. If I get this job this will be the first time I have 1 job instead of working multiple jobs. But I’m tired I’m so damn tired . I’m working my life away . I lost my 20s working and now my 30s is starting to look like my 20s . All I think about is how I won’t get that time back, do I really want a house which is a life bill ? Even if the house is paid off you still have to pay property taxes . I guess I want to live not work my life away .
I mean, im not gonna sit here and be grateful of peoples money situation when it ‘could be worse’. I dont think its a belief that the economy is bad, its the fact that companies have taken advantage of people by driving up prices way up solely for profit. If the price of things actually matched the price of inflation, many people wouldn’t be in crippling debt and could afford to make themselves a good home and family and comfortable life. Not everyone wants to be a billionaire, I literally just want to be able to by a house and go on a vacation every once in a while. But the system is set up to make people fail by keeping prices high and keeping people in debt. I cant even think about investing in my future when I can barely afford to live now. Without any major changes to society, all I see in my future is grinding until I die. Im sorry but I can’t even watch this entire article because the whole reason people are so doom and gloom has been completely dismissed.
My two sons are both Gen Z. They both went to college and have worked hard since they were age 16. While they do feel that there will probably not be a solid Social Security system (and have taken the steps to diversify in their retirement savings) when they plan to retire. However they have not given up. They work hard and they have saved hard. The son in Portland, Oregon bought a brand new two bedroom/two bathroom (no basement) home costing $450,000 while the younger one bought a modest three bedroom/two bathroom home with an unfinished basement in Michigan for $125,000. While the current economy with the current inflation situation is tight right now none of us feel that this is the worst economy ever. I feel that the years between 2008 and 2012 were the tightest recession in my lifetime. (I also lived through the high increases in home fuels in the 1980’s as well.) One thing that I find that is different are the expectations of the current generation of young people. They EXPECT to have cable TV/streaming/WIFI/cell phones/ yearly vacations/ new cars/eating out/nice new clothing/flatscreen TV’s etc. We simply did not expect to have the high of a lifestyle. When my sons were growing up we never had those expectations. We did not have Cable TV, we only took tent camping vacations, we did not eat out, we drove old vehicles, we did not even have a/c in our small modest three bedroom home. We priortized saving for education and retirement. We am retired now ( age 73 and 79) and through years of hard work and hard saving my husband and I have more money to live on now that we had before we retired.
Hey man imma keep it real with you. My parents and I lived a frugal life and it was honestly great. We had 2 vacations a year since I was a kid. We only got what we need and never on luxuries. We are pretty humble people. Frugal does not mean cheap. Frugal means you prioritize what you need and if you want treat yourself but with moderation. Plus we gave back to those in our community who were in need. Parents retired early (Both at 50) and are just enjoying life for what it is and they accumulated great wealth living like this and they are enjoying it together. Frugal lifestyle is good for humble people who are not attached to materialistic things and we still had nice clothes in the process. We just enjoy a low profile and not like to be seen. Cheap is a bad lifestyle. We never did that at all. I think the main thing is frugal people prefer comfortability over anything else. As long as we are comfortable we are happy. Frugal and cheap is not the same. You are describing cheap.
Okay… I agree with you on some things but being SILENT ABOUT THESE THINGS DON’T HELP EITHER. ESPECIALLY when you have some old @$$ boomer telling you ignorant thing like you’re not trying hard enough and their constant gaslighting. People aren’t necessarily Doomers, they’re being open about their struggles so that others aren’t afraid to talk about it and people don’t feel so alone. Boomers and the rich need to get called out for they caused.
First of all, It’s easy to say that the economy is “great” if by now you have a lot of money invested in the stock market, which I guess includes the author of the article. Yes, the stock market is doing great, all assets got more expensive because of inflation. Perhaps the wages have been growing in 2023, however considering the outrageous inflation we’ve had since 2019 the wages definitely haven’t kept up with much higher cost of living. This article actually reinforced my opinion that the rich people who own assets have gotten richer lately while young people and those on fixed income are getting screwed. They should stop printing money and continue the deficit spending! Mr Sethi even stated that in the 80’s a house would cost 2.5 x annual income, while now it takes 6 x the annual income. That’s a huge difference whereas housing is the biggest part of our cost of living. So in what way is this “great” economy helping me to have a stress free life? I guess all I have to do is have two full time jobs plus one part-time job. 😂
Is there any data available that would explain what the (typical) median house was like in 1980 vs 2020? My understanding, although only anecdotal, is that houses back in the 80s were much smaller, like a 2 bed 1.5 bath and under 1500 sq feet. Nowadays, houses are 3/4 bed 2.5 bathroom and 2500 sq feet with a 2-3 car garage. There aren’t many small homes being built. I understand that home prices have risen significantly, but homes have also exploded in size and that needs to be considered when looking at homes to purchase. Comparing the $/sq ft in the 80s vs 20s is probably a more appropriate measure of housing cost increase relative to inflation or whatever metric you want to use. Also, don’t compare yourself to your parents/grandparents current situation when they likely have owned 3-5 houses and were able to slowly and methodically step up and purchase more home. Compare yourselves to your peers who have purchased a home and see what they were able to purchase. If you only expect to purchase one home, then yes, it should take you longer and be more expensive so you can grow in to it…but no one needs to do that. Purchase what works for you for the next 5-7 years and reassess your needs every 2-3 years and PLAN on what your next home will look like, make a goal and work towards it.
I support your message, but let me explain why these people feel that way. You see, people live in the gap between their spending and their income. When we (me and my wife) were able to save around 10% of our income we felt really bad, because our standard of living is already quite low. Then the circumstances changed and it became 60% because the income grew and the lifestyle stayed the same. So we were feeling pretty great about ourselves. We felt like we have a bright future. Then the opportunity dired out and now we are back to around 30% all with the same standard of living. I would say that the financial confidence and the sense that you can make it starts from 50% of savings if you are a high earner. Anything less feels like working to live this life now and only when it becomes over 50% you feel like you actually contribute towards something. With 10% savings rate we could only afford to save money for emergencies and big purchases. With 30% we can start investing with a little glimpse of hope. Basically I described 3 totally different mental states of the same high earner couple. I’d say this can only come from that gap that you see in your bank account and not from a YouTube article. It’s all too personal.
Every generation faces peril, doom, and gloom. Its always the “worst ever!” …….maybe except Gen X who had a pretty sweet 90s I can see gen z’s POV – everything is going to suck as you get older and kinda hopeless so might as well live it up while you’re young to have some good memories to live off of but that’s short sighted, tbh life doesn’t really seem to begin now until your mid 30s. The 20s feels more like an extension of being a teenager.
My kids get sucked in by ads telling them they need X,Y& Z to make their life better…..i tell them they have fallen prey to marketing. I encourage them to put money towards long term savings/investments (Junior ISA in UK).with the small amount of pocket money they get. Need to develop these habits at young age.
Here is some food for thougut……. Inflation is not the only problem. It is corporate greed over empathy for the human condition. It is being told become a minimalist, live frugal and simplicity while the 1 and 10 percent are thriving off the labor and efforts put forth by the poor, all while doing the opposite and living their best life.
I completely disagree with your argument that cutting back on buying unnecessary things won’t help you afford a house. That’s not true at all. Obviously housing is a lot more expensive than it used to be but that doesn’t change the fact that you would have more money if you spent it wisely. The “avocado toast” argument isn’t to be taken literal. People are stupid with their finances. Imagine how much better off they would be if they didn’t spend money on Starbucks, fast food, the latest iPhones and Apple Watches, subscriptions to Spotify, Netflix, Disney+, etc. You see where I’m going with this. The point being, if you can’t afford it then don’t buy it. Either that or stop complaining about not being able to afford things if you’re not spending your money wisely. You can’t have it both ways.
To be fair… lets not OVERLOOK the extravagant expectations that many young people in the market today, seem to INSIST on having in their FIRST home. I’m a 1961 late boomer… and the homes I grew up in were “slums” compared to what’s being offered today. Phone on the wall in the kitchen, one bathroom SHARED in a 2-3BR home. Eat-in kitchen only or… if you’re lucky a smallish DR. Homes were also much smaller. If you had a 2000+sf house- you were “rich”. Most lived in <1500sf. I realize it's not the whole story... wages are not what they should be, etc. It's a mix of many things. IMHO.