Gen Z faces the worst financial crisis of any generation as soaring debt costs and stagnant wages threaten their financial future
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Reality check: Adulthood is more expensive than expected
Debt: A generational burden
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What they're doing right
51 percent have actively put money into savings over the past year
24 percent have focused on paying down debt
54 percent receive less than $500/month in family support, down from 44 percent a year ago
Only 25 percent contributed to a retirement account in the last year, but they aspire to do more
The double-edged sword
Debt, education, and the housing crisis
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Gen Z, the cohort born between 1997 and 2012, is stepping into adulthood with the odds stacked firmly against them. According to Bank of America's newly released 2025 Better Money Habits study, 72 percent of Gen Z adults (ages 18–28) are actively taking steps to improve their financial well-being, despite record levels of debt, rising living costs, and an economy that many experts say is 'less forgiving' than ever before.The cost of growing up has risen sharply. According to Bank of America's study conducted with Ipsos, a majority of Gen Zers report th at their monthly expenses are significantly higher than anticipated, particularly for groceries (63 percent), rent and utilities (47 percent), and dining out (42 percent). Over half (51 percent) say that the high cost of living is a direct barrier to achieving financial success.As a result, 64 percent have attempted to cut down on discretionary spending, 41 percent have reduced dining out, and 23 percent have switched to more affordable grocery options. In more intimate ways, they're dialing back too as roughly half of Gen Z men (53 percent) and women (54 percent) reported spending nothing on dating per month, underscoring how finances influence even their romantic lives.A separate report from Vola Finance paints a starker picture. It reveals that 63 percent of Gen Z users have already experienced delinquencies, far above the 37 percent recorded among older generations. The same study noted that Gen Z's average personal debt stands at a staggering $94,101, compared to $59,181 for millennials and $53,255 for Gen X.Despite mounting pressure, the Better Money Habits study shows that Gen Z is anything but complacent:The study also reveals that 66 percent of Gen Z don't feel pressured to keep up with their peers' spending, and 42 percent are comfortable telling friends they can't afford certain activities. In romantic relationships, 78 percent say financial responsibility is a 'green flag' when choosing a partner.Still, Gen Z faces a systemic issue as 55 percent say they don't have emergency savings to cover even three months of expenses, and 43 percent admit they're not on track to save for retirement in the next five years.Ironically, small acts of self-care are both comforting and costly. 57 percent of Gen Z say they buy themselves a treat at least once a week to celebrate wins or manage stress. But for 59 percent, these indulgences often lead to overspending.When financial anxiety sets in, 90 percent take proactive steps like checking bank balances or budgeting. Yet, a full third (33 percent) admit to avoiding their finances out of stress, while 30 percent splurge to feel better, a cycle familiar to many struggling with financial wellness.The financial pressure cooker Gen Z lives in is compounded by systemic forces. The Bank of America Institute notes that while median deposit levels for Gen Z remain elevated compared to 2019, this may not last long as costs continue to outpace income.Most students receive financial aid, and the average net price paid at private colleges is closer to $24,000 per year, according to Ron Lieber's The Price You Pay for College. In-state public university tuition often sits around $15,000.Still, home prices remain at record highs, and mortgage rates have made it increasingly difficult for Gen Z to enter the housing market, despite earning higher inflation-adjusted wages than prior generations, according to The Economist.Experts warn that if these trends continue, the implications could be national in scope. A generation unable to build wealth risks delaying key milestones, homeownership, family formation, retirement savings, and ultimately slows economic growth.Gen Z is often stereotyped as impulsive or financially irresponsible. But the numbers and their actions tell a different story. They're learning quickly, saving when they can, cutting costs, and navigating adulthood in an economy that wasn't built for them.
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Time of India
15 hours ago
- Time of India
Gen Z faces the worst financial crisis of any generation as soaring debt costs and stagnant wages threaten their financial future
Gen Z faces significant financial hurdles, including high debt and rising living costs, yet they are actively striving to improve their financial well-being. Many are cutting expenses, saving when possible, and prioritizing financial responsibility in relationships. Despite systemic challenges like the housing crisis and student debt, Gen Z demonstrates resilience and a proactive approach to navigating a difficult economic landscape. Tired of too many ads? Remove Ads Reality check: Adulthood is more expensive than expected Debt: A generational burden Tired of too many ads? Remove Ads What they're doing right 51 percent have actively put money into savings over the past year 24 percent have focused on paying down debt 54 percent receive less than $500/month in family support, down from 44 percent a year ago Only 25 percent contributed to a retirement account in the last year, but they aspire to do more The double-edged sword Debt, education, and the housing crisis Tired of too many ads? Remove Ads Gen Z, the cohort born between 1997 and 2012, is stepping into adulthood with the odds stacked firmly against them. According to Bank of America's newly released 2025 Better Money Habits study, 72 percent of Gen Z adults (ages 18–28) are actively taking steps to improve their financial well-being, despite record levels of debt, rising living costs, and an economy that many experts say is 'less forgiving' than ever cost of growing up has risen sharply. According to Bank of America's study conducted with Ipsos, a majority of Gen Zers report th at their monthly expenses are significantly higher than anticipated, particularly for groceries (63 percent), rent and utilities (47 percent), and dining out (42 percent). Over half (51 percent) say that the high cost of living is a direct barrier to achieving financial a result, 64 percent have attempted to cut down on discretionary spending, 41 percent have reduced dining out, and 23 percent have switched to more affordable grocery options. In more intimate ways, they're dialing back too as roughly half of Gen Z men (53 percent) and women (54 percent) reported spending nothing on dating per month, underscoring how finances influence even their romantic lives.A separate report from Vola Finance paints a starker picture. It reveals that 63 percent of Gen Z users have already experienced delinquencies, far above the 37 percent recorded among older generations. The same study noted that Gen Z's average personal debt stands at a staggering $94,101, compared to $59,181 for millennials and $53,255 for Gen mounting pressure, the Better Money Habits study shows that Gen Z is anything but complacent:The study also reveals that 66 percent of Gen Z don't feel pressured to keep up with their peers' spending, and 42 percent are comfortable telling friends they can't afford certain activities. In romantic relationships, 78 percent say financial responsibility is a 'green flag' when choosing a Gen Z faces a systemic issue as 55 percent say they don't have emergency savings to cover even three months of expenses, and 43 percent admit they're not on track to save for retirement in the next five small acts of self-care are both comforting and costly. 57 percent of Gen Z say they buy themselves a treat at least once a week to celebrate wins or manage stress. But for 59 percent, these indulgences often lead to financial anxiety sets in, 90 percent take proactive steps like checking bank balances or budgeting. Yet, a full third (33 percent) admit to avoiding their finances out of stress, while 30 percent splurge to feel better, a cycle familiar to many struggling with financial financial pressure cooker Gen Z lives in is compounded by systemic forces. The Bank of America Institute notes that while median deposit levels for Gen Z remain elevated compared to 2019, this may not last long as costs continue to outpace students receive financial aid, and the average net price paid at private colleges is closer to $24,000 per year, according to Ron Lieber's The Price You Pay for College. In-state public university tuition often sits around $15, home prices remain at record highs, and mortgage rates have made it increasingly difficult for Gen Z to enter the housing market, despite earning higher inflation-adjusted wages than prior generations, according to The warn that if these trends continue, the implications could be national in scope. A generation unable to build wealth risks delaying key milestones, homeownership, family formation, retirement savings, and ultimately slows economic Z is often stereotyped as impulsive or financially irresponsible. But the numbers and their actions tell a different story. They're learning quickly, saving when they can, cutting costs, and navigating adulthood in an economy that wasn't built for them.
News18
15 hours ago
- News18
How Hostels Are Becoming The Preferred Co-Living Choice For Young Professionals
Last Updated: With a rise in remote work opportunities, Gen Z believes in working from new destinations everyday. This has led to a boom in hostel culture across India. Hostels in India have officially shaken off their backpacker stereotype. What began as budget-friendly stopovers has evolved into lifestyle destinations for Gen Z, solo travellers, and remote professionals. With their chill vibe, cost-effective setup, and built-in community, hostels today are more than just a bed for the night; they're a way to live. As rental prices soar and long-term leases grow more rigid, hostels offer a flexible, no-fuss alternative. Add to that the rising popularity of remote work, and you've got the perfect storm for a co-living boom. Short Stays Are Getting Longer Hostel stays are no longer limited to weekend getaways or quick pit stops. Among digital nomads and young professionals, the average stay has grown significantly – from five nights in 2019 to nearly 14 nights in 2024. That's largely due to hostels adapting to new lifestyles, with nearly 73% offering co-working spaces that support both productivity and play. 'We've turned the idea of hostels into vibrant, all-in-one spaces where people come to live, work, and connect," says Pankaj Parwanda, co-founder of goSTOPS. 'From travelers seeking green escapes to Gen Z explorers chasing authentic community vibes, today's hostels offer experiences that go far beyond just a place to stay." 'Today's generation values easy access, affordability, and a lifestyle that blends fun with comfort," Parwanda explains. 'We've seen one-time guests return and gradually adopt this way of living because it feels more human, connected, and real." It's a reflection of a broader generational shift: freedom over permanence, connection over isolation, and experiences over ownership. No Chores, No Landlords, No Stress Modern hostels are more than convenient; they're plug-and-play living solutions. No utility bills, furniture shopping, or landlord negotiations. Just move in, unpack, and focus on your work, passions, or travels. For those craving independence without the baggage, hostel living hits the sweet spot. Today's hostels represent a conscious shift in how young people want to live. They're choosing fluidity, flexibility, and freedom, while still having a place to call home. Whether it's for a week or a few months, hostel life is no longer the alternative. It's the new normal. view comments First Published: August 02, 2025, 10:19 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Economic Times
a day ago
- Economic Times
Small brands teach new tricks to FMCG giants
India's fast-moving consumer goods (FMCG) sector, long dominated by legacy giants like Hindustan Unilever (HUL), Nestlé India, ITC and Tata Consumer Products, is undergoing a slow but definite seismic shift. The narrative that big players hold the upper hand in the market is slowly losing its grip, thanks to the recent rise of smaller, regional brands. These disruptors are not only reshaping the competitive landscape by capitalising on a combination of innovation, nimbleness and a deeper understanding of local preferences, they are also teaching a lesson to the big companies which are leanring to do better and different. ADVERTISEMENT "Startups and regional brands are good for the business. They do two things. One, they extend the variety for the consumer, and secondly, they give us additional inspiration for improving, making ourselves faster and smarter," Nestle India's outgoing managing director Suresh Narayanan told PTI in an interview earlier this week. According to Narayanan, today every brand has to be relevant to Gen Z and Gen Alpha consumers, who do not give much importance to the historical relevance of brands. "It goes by what is in it for me, so Maggi noodles have to be relevant to the Gen Z consumer and not simply relevant because my father consumes it. So I think both of these are truths that we have realised as a company and are constantly working on to improve and control the price of our brands so that we do not become irrelevant in the context of the consumption story," he said. As these smaller players continue to eat into the market share of traditional FMCG giants, it's clear that the future of India's FMCG market will be defined by adaptability and agility. "The game is definitely changing; it's changing across the world," Narayanan told ET in a recent interview. "In some parts of the world, big brands are no longer the marquees of quality and consumption. It's the local brands, the house brands." The rise of small FMCG brandsHundreds of regional and direct-to-consumer brands, ranging from noodles and tea to cosmetics and snacks, disrupting and taking share from large players. 1to3 noodles, Rungta tea, Balaji Wafers and Mario biscuits are among local brands disrupting the large of the primary reasons for the rise of small and regional FMCG brands is the changing nature of consumer preferences. In a country as vast and diverse as India, national brands, though well-established, often find it challenging to cater to the unique needs of different regions. Smaller brands, on the other hand, have the advantage of being highly localised. Their focus on specific geographical areas, local tastes and regional customs allows them to craft products that resonate deeply with consumers in those regions. ADVERTISEMENT "These small guys are not saying 'I want to sell one million tonnes'; they're saying 'I want to sell in six localities, in three pin codes'," Narayanan told ET. Legacy companies "really have to learn to think of smaller scale, more nimble, profitable operations, because the large-scale opportunities such as creating another Maggi noodles are going to be very difficult." They need to do multiple small things and fast, he said. Hyper-localisation allows smaller brands to quickly adapt to changing consumer needs and preferences, making them nimbler than the larger players who are often bogged down by their massive brands are also rising because they are able to undercut large FMCG companies on price while maintaining quality. These brands often have lower overhead costs due to their smaller operations and local supply chains, which allow them to offer products at more competitive prices. Moreover, by focusing on specific market segments, they can tweak their offerings and pricing strategies in real-time based on local demand patterns. 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ADVERTISEMENT Investors begin to chase small brandsAs the rise of small brands becomes noticable, even as big companies struggle with low demand, they have cuaght the eye of investors too. About a dozen small, regional consumer brands are either in the process of raising private equity funding or are being pursued by investors keen to acquire minority stakes, executives told ET a few weeks ago. These include Ahmedabad-based frozen food maker Iscon Balaji, skincare brand Dermabay, condiment and noodle brand Moi Soi, Raipur-based Zoff Spices, and soft drink maker Bindu Jeera, as per the ET report. The intense activity in small and mid-sized companies comes at a time when their larger rivals are trailing in finalising acquisitions and broader growth plans as they battle with sluggish demand in India's major mid-sized funding deals were finalised in recent weeks including snacking brand Khari Foods, desserts chain FES Café, and moss-based supplement maker CosMoss. Chandigarh-based Lahori Zeera and dairy and daily essential brand Country Delight too have raised more than Rs 200 crore each in funding. ADVERTISEMENT Executives attribute the surge in investor interest to a combination of factors. 'We thought premium was about affluent metros but it's very much visible in smaller towns. Also, quick commerce and e-commerce have reduced the advantage of legacy brands on distribution and availability,' Kannan Sitaram, co-founder and partner at Fireside Ventures, an early-stage fund, which has invested in Jaipur-based dairy firm Frubon, teen-care beauty brand Sammmm, and Chennai-based Sweet Karam Coffee, among others, told ET. 'It is this opportunity that investors including us are looking at — to build brands based on regional foundations.' Industry trackers said while the bigger consumer transactions have become rare with large companies grappling with slowing sales, especially in cities, it is the smaller ticket deals that have surged. Big brands are learning from small brands Small and rehgional brands have sure disrupted big brands but they are adapting to this disruption. Big FMCG companies are recognising the rising tide of regional brands, and many are seeking to collaborate rather than compete. Nestlé India, for example, has set up an accelerator program to work closely with startups and regional brands. Narayanan's comments reflect a broader industry shift towards collaboration and learning. By partnering with these smaller players, large companies not only gain valuable insights into local market dynamics but also identify opportunities for approach aligns with the growing trend of corporates leveraging startups for faster innovation cycles and new product development. In industries where the life cycle of new products is shrinking, large FMCG companies are increasingly turning to nimble startups to bring fresh ideas and technologies into their portfolio. Whether it's through partnerships, acquisitions or joint ventures, big brands are acknowledging that smaller, regional players are an essential part of their future said regional competition is good for the industry. "It keeps companies from getting complacent," he told ET. "Yes, they're playing the pricing game but what we can bring to the table is much wider." He said "companies have to increasingly work on keeping their brands relevant," and stressed the need for accelerating premiumisation. While keeping affordability intact, there are "enough opportunities for premiumisation in chocolates, milk and nutrition, coffee, pet foods," he said. To stay relevant in an increasingly more fragmented, dynamic and competitive environment, FMCG giants must embrace new technologies, adopt faster go-to-market strategies, and ensure that their products remain aligned with changing consumer tastes. This also means developing a more robust digital presence, leveraging e-commerce platforms, and engaging with consumers directly through D2C channels. Moreover, companies need to embrace regional diversity in their offerings. Customizing products to fit local preferences, collaborating with local innovators, and building brand loyalty through hyper-local marketing strategies are now essential to maintaining market share. (You can now subscribe to our Economic Times WhatsApp channel)
