It’s a good news/bad news situation for younger adults ages 18 to 43. While most younger adults are earning more than ever before, they’re also more focused on short-term spending rather than long-term savings. Their net worth may have surged by 80% since 2019 but because they are spending more on rent, groceries, fine dining, shopping, and travel, Millennials and Gen Zers are unable to save and invest. A CNBC survey shows that nearly half of young adults admit they would only be able to pay their bills for one month if unemployed. Those are scary statistics.
No matter how dire their financial situation, younger adults continue to live in the now spending money on what they want when they want while crossing their fingers and hoping everything works out in the end. They’re even opening lines of credit to finance luxury vacations with a plan to “pay it off in a few months”, resulting in millennial credit card balances surpassing baby boomers’ for the first time.
Ironically, while younger adults seem to be having a ball and living life to the fullest, they tend to be pessimistic about their futures. 1 in 5 millennials believe they’ll never be able to own a home. Two-thirds of Gen Zersbelieve they’ll never be able to afford to retire. These problems are self-induced, and every individual has the power to change their financial futures by making better choices.