Generation Z’s efforts to be financially independent are slowed by their mounting personal debt, a problem that appears only to be getting worse for the youngest adults.
Gen Z young adults in their early to mid-20s, most of whom have just entered the workforce or are trying to do so, are plagued by stubbornly low wages and record inflation over the past few years, pushing them into debt, The Wall Street Journal reported. Those born between 1997 and 2012 are generally considered to be part of Generation Z.
Many turn to credit cards just to cover the basics like food and rent.
For young adults 22 to 24, the average credit card balance was $2,834 in the last quarter of 2023, according to credit-reporting agency TransUnion. Back in 2013, the average balance for this group was only $2,248, adjusted for inflation.
Rent is likely the main driver of young people’s climbing debt. It is now cheaper to rent than to buy property.
Thanks to rising housing prices and mortgage rates, renting a two-bedroom residence is cheaper than buying that property for about 89% of Americans, according to a November analysis by The Economist.
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Author: Faith N
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