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NBC News
07-06-2025
- Business
- NBC News
When it comes to saving, Gen Z asks: ‘What's the point?' That's dangerous, expert says
Gen Z seems to have a case of economic malaise. Nearly half (49%) of its adult members — the oldest of whom are in their late 20s — say planning for the future feels 'pointless,' according to a recent Credit Karma poll. A freewheeling attitude toward summer spending has taken root among young adults who feel financial 'despair' and 'hopelessness,' said Courtney Alev, a consumer financial advocate at Credit Karma. They think, 'What's the point when it comes to saving for the future?' Alev said. That 'YOLO mindset' among Generation Z — the cohort born from roughly 1997 through 2012 — can be dangerous: If unchecked, it might lead young adults to rack up high-interest debt they can't easily repay, perhaps leading to delayed milestones like moving out of their parents' home or saving for retirement, Alev said. But your late teens and early 20s is arguably the best time for young people to develop healthy financial habits: Starting to invest now, even a little bit, will yield ample benefits via decades of compound interest, experts said. 'There are a lot of financial implications in the long term if these young people aren't planning for their financial future and [are] spending willy-nilly however they want,' Alev said. Why Gen Z feels disillusioned That said, that many feel disillusioned is understandable in the current environment, experts said. The labor market has been tough lately for new entrants and those looking to switch jobs, experts said. The U.S. unemployment rate is relatively low, at 4.2%. However, it's much higher for Americans 22 to 27 years old: 5.8% for recent college grads and 6.9% for those without a bachelor's degree, according to Federal Reserve Bank of New York data as of March 2025. Young adults are also saddled with debt concerns, experts said. 'They feel they don't have any money and many of them are in debt,' said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California. 'And they're wondering if the degree they have (or are working toward) will be of value if A.I. takes all their jobs anyway. So is it just pointless?' About 50% of bachelor's degree recipients in the 2022-23 class graduated with student debt, with an average debt of $29,300, according to College Board. The federal government restarted collections on student debt in default in May, after a five-year pause. The Biden administration's efforts to forgive large swaths of student debt, including plans to help reduce monthly payments for struggling borrowers, were largely stymied in court. 'Some hoped some or more of it would be forgiven, and that didn't turn out to be the case,' said Sun, a member of CNBC's Financial Advisor Council. Meanwhile, in a 2024 report, the New York Fed found credit card delinquency rates were rising faster for Gen Z than for other generations. About 15% had maxed out their cards, more than other cohorts, it said. It's also 'never been easier to buy things,' with the rise of buy now, pay later lending, for example, Alev said. BNPL has pushed the majority of Gen Z users — 77% — to say the service has encouraged them to spend more than they can afford, according to the Credit Karma survey. The firm polled 1,015 adults ages 18 and older, 182 of whom are from Gen Z. These financial challenges compound an environment of general political and financial uncertainty, amid on-again-off-again tariff policy and its potential impact on inflation and the U.S. economy, for example, experts said. 'You start stacking all these things on top of each other and it can create a lack of optimism for young people looking to get started in their financial lives,' Alev said. How to manage that financial malaise Young adults should try to rewire their financial mindset, experts said. 'Most importantly, you don't want to bet against yourself,' Sun said. 'See it as an opportunity,' she added. 'If you're young and your expenses are low, this is the time to invest as much as you can right now.' Time is working in their favor, due to the ability to compound investment growth over multiple decades, Alev said. While investing might 'feel impossible,' every little bit helps, even if it's just investing $10 a month right now into a tax-advantaged retirement account like a Roth IRA or 401(k). The latter is among the easiest ways to start, due to automatic payroll deduction and the possibility of earning a 'match' from your employer, which is 'probably the closest thing to free money any of us will get in our lifetime,' Alev said.
CNBC
07-06-2025
- Business
- CNBC
When it comes to saving, Gen Z asks: 'What's the point?' That's dangerous, expert says
Gen Z seems to have a case of economic malaise. Nearly half (49%) of its adult members — the oldest of whom are in their late 20s — say planning for the future feels "pointless," according to a recent Credit Karma poll. A freewheeling attitude toward summer spending has taken root among young adults who feel financial "despair" and "hopelessness," said Courtney Alev, a consumer financial advocate at Credit Karma. They think, "What's the point when it comes to saving for the future?" Alev said. That "YOLO mindset" among Generation Z — the cohort born from roughly 1997 through 2012 — can be dangerous: If unchecked, it might lead young adults to rack up high-interest debt they can't easily repay, perhaps leading to delayed milestones like moving out of their parents' home or saving for retirement, Alev said. But your late teens and early 20s is arguably the best time for young people to develop healthy financial habits: Starting to invest now, even a little bit, will yield ample benefits via decades of compound interest, experts said. "There are a lot of financial implications in the long term if these young people aren't planning for their financial future and [are] spending willy-nilly however they want," Alev said. That said, that many feel disillusioned is understandable in the current environment, experts said. The labor market has been tough lately for new entrants and those looking to switch jobs, experts said. The U.S. unemployment rate is relatively low, at 4.2%. However, it's much higher for Americans 22 to 27 years old: 5.8% for recent college grads and 6.9% for those without a bachelor's degree, according to Federal Reserve Bank of New York data as of March 2025. Here's a look at other stories affecting the financial advisor business. Young adults are also saddled with debt concerns, experts said. "They feel they don't have any money and many of them are in debt," said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California. "And they're wondering if the degree they have (or are working toward) will be of value if A.I. takes all their jobs anyway. So is it just pointless?" About 50% of bachelor's degree recipients in the 2022-23 class graduated with student debt, with an average debt of $29,300, according to College Board. The federal government restarted collections on student debt in default in May, after a five-year pause. The Biden administration's efforts to forgive large swaths of student debt, including plans to help reduce monthly payments for struggling borrowers, were largely stymied in court. "Some hoped some or more of it would be forgiven, and that didn't turn out to be the case," said Sun, a member of CNBC's Financial Advisor Council. Meanwhile, in a 2024 report, the New York Fed found credit card delinquency rates were rising faster for Gen Z than for other generations. About 15% had maxed out their cards, more than other cohorts, it said. It's also "never been easier to buy things," with the rise of buy now, pay later lending, for example, Alev said. BNPL has pushed the majority of Gen Z users — 77% — to say the service has encouraged them to spend more than they can afford, according to the Credit Karma survey. The firm polled 1,015 adults ages 18 and older, 182 of whom are from Gen Z. These financial challenges compound an environment of general political and financial uncertainty, amid on-again-off-again tariff policy and its potential impact on inflation and the U.S. economy, for example, experts said. "You start stacking all these things on top of each other and it can create a lack of optimism for young people looking to get started in their financial lives," Alev said. Young adults should try to rewire their financial mindset, experts said. "Most importantly, you don't want to bet against yourself," Sun said. "See it as an opportunity," she added. "If you're young and your expenses are low, this is the time to invest as much as you can right now." Time is working in their favor, due to the ability to compound investment growth over multiple decades, Alev said. While investing might "feel impossible," every little bit helps, even if it's just investing $10 a month right now into a tax-advantaged retirement account like a Roth IRA or 401(k). The latter is among the easiest ways to start, due to automatic payroll deduction and the possibility of earning a "match" from your employer, which is "probably the closest thing to free money any of us will get in our lifetime," Alev said. "This is actually the most exciting time to invest, because you're young," Sun said. Instituting mindful spending habits, such as putting a waiting period of at least 24 hours in place before buying a non-essential item, can help prevent unnecessary spending, she added. Sun advocates for paying down high-interest debt before focusing on investing, so interest payments don't quickly spiral out of control. Or, as an alternative, they can try to fund a 401(k) to get their full company match while also working to pay off high-interest debt, she said. "Instead of getting into the 'woe is me' mode, change that into taking action," Sun said. "Make a plan, take baby steps and get excited about opportunities to invest."
Euronews
14-05-2025
- Business
- Euronews
Here's how you can handle your finances during economic uncertainty
Financial markets are volatile with consumer confidence at its lowest level in five years - as economists point to a higher risk of recession. It all adds up to financial uncertainty for a lot of people. Roughly half of US adults say that President Trump's trade policies will increase prices 'a lot,' according to a recent poll by The Associated Press-NORC Center for Public Affairs Research. About half of Americans are 'extremely' or 'very' concerned about the possibility of the US economy going into a recession in the next few months. Matt Watson, CEO of Origin, a financial planning app, says it's a period of uncertainty for everyone, including experts. 'No one has a crystal ball. No one, even the people that do this professionally and have done it very successfully for many years, know what's going to happen,' he said. If you're worried about how economic uncertainty might affect you, here are some expert recommendations: The first step to preparing for uncertain financial times is knowing your starting point, Watson said. Look at your budget or your debit card expenses so you can understand how much you spend every month. 'Take stock of where you are across a number of different categories,' Watson said. Looking at the state of your savings and investments can also provide you with an idea of your overall financial health. The more nonessential expenses you can pause, the more you can save for an emergency. 'Your choice is really to cut now or cut later, so it's easier to cut now and have a cushion,' Watson said. If you're having difficulty finding where to cut back, Jim Weil, managing partner at Private Vista, a financial planning firm, recommends that you divide your expenses into three buckets: needs, wants and wishes. Wishes are larger expenses that can be postponed, such as a big vacation. For the time being, cut back expenses from the wishes section until you feel like your finances are in a good place. Between news about tariffs and job losses, you might feel your anxiety rising. So, it's important that you protect your mental health while also caring about your finances said Courtney Alev, consumer advocate at Credit Karma. Sometimes, reading too much news that can affect your finances can become overbearing and create more stress than you need. 'It's good practice to stay informed but you don't want to let the news cycle consume you,' Alev said. If you find yourself feeling high levels of stress or anxiety when it comes to your finances, it's best to contact a professional who can assist you, such as a financial therapist. If looking for regular mental health services, most health insurance covers some type of mental health assistance. If you don't have health insurance, you can look for sliding-scale therapists around the country. Rather than worrying too much about the economics of the entire country, Alev recommends that you focus on the aspects of your personal life that you can control in order to feel more confident in case there is a recession. 'Identify any changes that you might need to make to have more of a safety net in place that could give you confidence,' Alev said. Things you can control include budgeting, creating an emergency fund and cutting unnecessary expenses. Whether you are worried about your job security or the high prices of goods, it's best that you sit down and reassess your budget to create an emergency fund. An emergency fund can feel unattainable if finances are already difficult, but having even a small amount of cash saved can make the difference, Alev said. Ideally, your emergency fund should amount to three to six months of expenses. Weil recommends you start thinking about any special commitments that you might have in the next year or two, such as college tuition or moving. If you are planning for a large financial commitment in the near future, Weil recommends that you plan to build a larger emergency fund. Alev recommends regularly adjusting your budget to keep your financial goals on track. Monthly budget check-ins can help identify when you are overspending or if your needs change. 'A budget is only as good as it is to help you actually make decisions, so don't be afraid to update and adapt your budget as the months go by,' Alev said. Many people struggle with debt, whether it's credit card debt or student loan debt, which limits their ability to save. But, if you want to create an emergency fund while also tackling your debt, it will take some prioritisation. 'I would think about different kinds of debt differently,' Weil said, adding that you can place debt in three buckets: short-, medium- and long-term debt. Weil recommends that you prioritise paying off high-interest debt such as your credit card. By making extra payments or paying over the minimum payment, you will be able to pay it off quicker. Student loan debt and long-term debt such as a mortgage can be tackled with more modest payments while you focus on creating an emergency fund. If you have credit card debt and you can't make too much progress in paying it down, Alev recommends you try to eliminate or reduce the amount of credit you use. While the stock market has had some bad days, it's best that you are not reactive to the market. If you have investments, especially in retirement vehicles, it's best not to make rushed decisions, Alev said. 'You really want to try not to panic. It can be unnerving but most likely, you should have time to make that up,' she added. If you're closer to retirement, Alev recommends that you look into more conservative investments.
Yahoo
09-05-2025
- Business
- Yahoo
Gen Z and Millennials Are Redefining What Items Are ‘Necessities' Amidst Economic Uncertainty
A cost-of-living crisis is hardly new territory for Millennial and Gen Z Americans as a new cloud of uncertainty hangs over the state of personal finances, but consumer behaviors continue to shift. According to a new consumer survey report from Credit Karma, many young consumers may even be embracing a 'life goes on' mentality when it comes to spending as they redefine what they are and are not willing to live without. Effectively, many 'nonessentials' have become the 'new necessities.' Aiming to better understand the sentiments of young American consumers today, Credit Karma's survey, conducted by The Harris Poll, polled more than 2,000 U.S. adults ages 18 and older from April 7 to 9. The survey asked respondents about how they are planning to tackle the cost-of-living crisis, specifically how it will impact spending. More from WWD As Footwear Costs Soar Amid Tariff Pressures, New Report Says 78% of Shoppers Have Abandoned Purchases Due to Sticker Shock The Top 5 Consumer Behaviors to Watch in 2025, and Beyond Millennials and Gen Z Are Transforming Luxury: The Era of Experiences, Identity and Meaning Key findings of the survey include plans to cut back. Seventy-four percent of Gen Z said that if their financial situation continues to worsen, they will 'strongly consider' cutting back on nonessential spending. This sentiment was shared by 82 percent of Millennials, 86 percent of Gen X and 87 percent of Baby Boomers. However, 87 percent of Gen Z and 84 percent of Millennials told the company that they consider certain nonessential items and services to be 'necessities.' In the report, 'necessities' were defined as 'things that they're willing to spend money on, no matter the state of their finances.' Fifty-six percent of Gen Z and 59 percent of Millennials said spending on hobbies and interests is a necessity, not a luxury. And nearly half of young consumers (51 percent of Millennials and 45 percent of Gen Z) said they would rather reduce long-term savings than give up certain lifestyle experiences including going out to eat, travel and fitness memberships. 'Generally speaking, heightened emotions can drive us to spend money, whether it's as a distraction, to have something to look forward to, or a way to spark joy during stressful times,' said Courtney Alev, Credit Karma's consumer financial advocate. 'We've seen this come up before in our data just over two years ago, when 39 percent of Americans said they identify as emotional spenders, jumping to 58 percent of Gen Z and 52 percent of Millennials.' Alev added that it's not entirely surprising that young people are choosing to find comfort in spending on things that they enjoy amid economic uncertainty. 'The cost of living has been persistently high for a few years now, and it's possible younger generations have accepted this as their new reality and have adjusted their budgets accordingly.' The top nonessential items and services that Americans consider to be necessities are streaming services like Netflix and Hulu. This sentiment was shared by 36 percent of Gen Z, 37 percent of Millennials, 37 percent of Gen X and 29 percent of Baby Boomers. Meanwhile, the top fashion- and beauty-related nonessential items and services that Americans consider to be necessities are skin care and beauty products (27 percent of Gen Z and 26 percent of Millennials), new clothes (23 percent of Gen Z and 19 percent of Millennials) and skin care and beauty treatments like manicures, facials or hair appointments (20 percent of Gen Z and Millennials). When asked what is influencing them to take on this philosophy when it comes to spending, 60 percent of Millennials and 53 percent of Gen Z who consider some nonessential items and services to be necessities, cited social media. At the same time, the authors of the report noted that many Gen Z respondents may feel more comfortable given they have some form of a financial safety net, like parents who support them. Best of WWD The Definitive Timeline for Sean 'Diddy' Combs' Sean John Fashion Brand: Lawsuits, Runway Shows and Who Owns It Now What the Highest-paid CEOs at U.S. Fashion and Retail Companies Make Confidence Holds Up, But How Much Can Consumers Take? Error while retrieving data Sign in to access your portfolio Error while retrieving data
Los Angeles Times
03-05-2025
- Business
- Los Angeles Times
Tips for handling your finances in a time of economic uncertainty
NEW YORK — Financial markets are volatile. Consumer confidence is at its lowest level in five years. Economists say recession risks are rising. It all adds up to financial uncertainty for a lot of Americans. Roughly half of U.S. adults say that President Trump's trade policies will increase prices 'a lot,' according to a recent poll by the Associated Press-NORC Center of Public Affairs Research. And about half of Americans are 'extremely' or 'very' concerned about the possibility of the U.S. economy going into a recession in the next few months. Matt Watson, CEO of Origin, a financial planning app, says it's a period of uncertainty for everyone, including experts. 'No one has a crystal ball. No one, even the people that do this professionally and have done it very successfully for many years, know what's going to happen,' he said. If you're worried about how economic uncertainty might affect you, here are some expert recommendations: The first step to preparing for uncertain financial times is knowing your starting point, Watson said. Look at your budget or your debit card expenses so you can understand how much you spend every month. 'Take stock of where you are across a number of different categories,' Watson said. Looking at the state of your savings and investments can also provide you with an idea of your overall financial health. The more nonessential expenses you can pause, the more you can save for an emergency. 'Your choice is really to cut now or cut later, so it's easier to cut now and have a cushion,' Watson said. If you're having difficulty finding where to cut back, Jim Weil, managing partner at Private Vista, a financial planning firm, recommends that you divide your expenses into three buckets: needs, wants and wishes. Wishes are larger expenses that can be postponed, such as a vacation to Europe. For the time being, cut back expenses from the wishes section until you feel like your finances are in a good place. Between news about tariffs and job losses, you might feel your anxiety rising. So, it's important that you protect your mental health while also caring about your finances, said Courtney Alev, consumer advocate at Credit Karma. Sometimes, reading too much news about issues that could affect your finances can become overbearing and create more stress than you need. 'It's good practice to stay informed but you don't want to let the news cycle consume you,' Alev said. If you find yourself feeling high levels of stress or anxiety when it comes to your finances, it's best to contact a professional who can assist you, such as a financial therapist. If looking for regular mental health services, most health insurance covers some type of mental health assistance. If you don't have health insurance, you can look for sliding-scale therapists around the country, including through and the Anxiety and Depression Assn. of America directory. Rather than worrying too much about the economics of the entire country, Alev recommends that you focus on the aspects of your personal life that you can control in order to feel more confident in case there is a recession. 'Identify any changes that you might need to make to have more of a safety net in place that could give you confidence,' Alev said. Things you can control include budgeting, creating an emergency fund and cutting unnecessary expenses. Whether you are worried about your job security or the high prices of goods, it's best that you sit down and reassess your budget to create an emergency fund. An emergency fund can feel unattainable if finances are already difficult, but having even a small amount of cash saved can make the difference, Alev said. Ideally, your emergency fund should amount to three to six months' worth of expenses. Weil recommends that you start thinking about any special commitments that you might have in the next year or two, such as college tuition or moving. If you are planning for a large financial commitment in the near future, Weil recommends that you plan to build a larger emergency fund. Alev recommends regularly adjusting your budget to keep your financial goals on track. Monthly budget check-ins can help identify when you are overspending or if your needs change. 'A budget is only as good as it is to help you actually make decisions, so don't be afraid to update and adapt your budget as the months go by,' Alev said. Many Americans struggle with debt, whether it's credit card debt or student loan debt, which limits their ability to save. But, if you want to create an emergency fund while also tackling your debt, it will take some prioritization. 'I would think about different kinds of debt differently,' Weil said, adding that you can place debt in three buckets: short-, medium- and long-term debt. Weil recommends that you prioritize paying off high-interest debt such as your credit card. By making extra payments or paying over the minimum payment, you will be able to pay it off quicker. Student loan debt and long-term debt such as a mortgage can be tackled with more modest payments while you focus on creating an emergency fund. If you have credit card debt and you can't make too much progress in paying it down, Alev recommends you try to eliminate or reduce the amount of credit you use. While the stock market has had some bad days, it's best to stay cool. If you have investments, especially in retirement vehicles such as your 401(k), it's best not to make rushed decisions, Alev said. 'You really want to try not to panic. It can be unnerving but most likely, you should have time to make that up,' she added. If you're closer to retirement, Alev recommends that you look into more conservative investments. Morga writes for the Associated Press.
