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NBC News
2 days ago
- 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
3 days ago
- 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."
Yahoo
18-05-2025
- Business
- Yahoo
4 ‘Necessities' Boomers Are Spending Money on That Could Harm Their Finances
When determining a budget, it's important to have a firm grasp on what is a 'necessity' and what is a discretionary expense. But sometimes the distinctions aren't so clear cut. Qualifying discretionary expenses as necessities can mean overspending on these items and utilizing money that's better off being put toward short- or long-term savings goals or debt repayment. This can be especially harmful for boomers, many of whom are retired and living on a fixed income. Check Out: Read Next: 'Most Americans, including boomers, likely know what constitutes a traditional 'necessity,' but it's human nature to want to spend on things that bring us joy, regardless of whether we can live with or without it,' said Courtney Alev, consumer financial advocate at Credit Karma. 'The more important decision for boomers to weigh is how their nonessential spending habits impact their budgets and ability to stay on top of their financial obligations.' Here's a look at the nonessential expenses boomers are most likely to consider necessities. A recent Credit Karma study asked Americans of all ages to share the top nonessential items and services that they consider to be necessities. Among boomers, the top choices were streaming services like Netflix and Hulu (29%), travel (23%), dining out (23%) and skin care and beauty products (22%). 'People are choosing to find comfort in spending on the things they enjoy, even amid economic uncertainty,' Alev said. 'However, it's important to audit your finances to be prepared in case of an unexpected expense or income change.' She recommended boomers audit their nonessential spending to find ways to cut costs. 'When deciding where to cut back, prioritize what brings you the most joy and value,' Alev said. 'For instance, if taking a vacation is how you want to treat yourself this summer, consider limiting how much you dine out or spend on skin care so you can allocate that spend toward an emergency savings fund instead. That way, you still get to treat yourself with summer travel while also building a financial cushion in case of an unexpected event or expense.' Discover More: Discretionary spending should be part of a boomer's budget — they just shouldn't let it take precedence over other financial priorities. 'My No. 1 piece of advice is to ensure you're prioritizing your financial security above all else,' Alev said. 'Before you spend on your wants, make sure you're prioritizing reducing or eliminating any high-interest debts and that you're actively saving for a rainy day. Consider gamifying the progress you make on your financial goals, such as treating yourself to a meal out with friends once you've achieved your savings goal for the week.' In general, boomers do tend to be responsible spenders, Alev noted. 'We know from our study that most boomers are thinking rationally about their nonessential spending,' she said. 'A majority (87%) say they will strongly consider cutting back on their nonessential spending if their financial situation worsens in the coming months, and 84% are not willing to take on credit card debt in order to maintain it.' More From GOBankingRates Surprising Items People Are Stocking Up On Before Tariff Pains Hit: Is It Smart? 7 Luxury SUVs That Will Become Affordable in 2025 5 Little-Known Ways to Make Summer Travel More Affordable Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy Sources Credit Karma, 'New Necessities: Young Americans redefine essential spending amid economic uncertainty' This article originally appeared on 4 'Necessities' Boomers Are Spending Money on That Could Harm Their Finances Sign in to access your portfolio
Yahoo
17-05-2025
- Business
- Yahoo
Some 45% of Gen Z Say They'd Rather Cut Savings Than Give Up Eating Out — Have Spending Priorities Gone Off Track?
In an era of rising prices and economic uncertainty, it might come as a surprise to learn that many young Americans are prioritizing "fun" over funds. A recent Intuit Credit Karma study finds that 45% of Gen Z would rather reduce long-term savings than give up dining out — a trend that raises questions about spending habits and financial resilience. The Credit Karma survey asked 2,074 U.S. adults which non-essential items they'd still happily pay for, no matter their cash flow. A striking 87% of Gen Z (ages 18–28) say they consider certain non-essentials "necessities," compared with 84% of millennials (ages 29–44). In other words, things like streaming services, skincare products, and dining out have become budget line items, not luxuries. Don't Miss: Hasbro, MGM, and Skechers trust this AI marketing firm — Maximize saving for your retirement and cut down on taxes: . When pressed on cutting back if money gets tight, nearly three-quarters of Gen Z, or 74%, say they'd strongly consider trimming non-essential expenses — still lower than the 82% of millennials, 86% of Gen X (ages 45–60) and 87% of baby boomers (ages 61–79) willing to do the same. Perhaps the most eye-opening stat: just over half of millennials (51%) and 45% of Gen Z would opt to shrink their long-term savings rather than sacrifice lifestyle experiences such as eating out, travel, or gym memberships. This suggests a "live for today" mindset, where the immediate payoff of a night out or a weekend trip outweighs the abstract benefit of a beefed-up retirement account. Trending: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Several factors may be at play: Social Media Influence: More than half of millennials, or 60%, and over half of Gen Z, or 53%, report that social media has shaped their view of what's "necessary," nudging them toward spending on trending services and experiences. Safety Nets: Approximately 22% of Gen Z say they haven't tightened their budgets for a possible recession because they rely on a financial cushion, such as parental support. Acclimated Budgets: With living costs high, many young people may have already adjusted their baseline expenses, treating certain non-essentials as routine rather than optional. "It's not entirely surprising that young people today are choosing to find comfort in spending on the things they enjoy, even amid economic uncertainty," says Courtney Alev, consumer financial advocate at Intuit Credit recommends a simple audit: setting aside a small, regular amount—say $20 a week—into an emergency fund. "It's not about cutting out everything that brings you joy, but more about creating a financial cushion. Even the smallest steps could mean less stress and fewer tough choices in the near future." With nearly half of Gen Z willing to tap savings for lifestyle perks, it's clear that attitudes toward money are evolving. Are these young adults simply redefining what makes life worth living, or have spending priorities truly gone off track? As prices and expectations both remain high, the choices today's consumers make could shape their financial well-being for years to come. Read Next: Nancy Pelosi Invested $5 Million In An AI Company Last Year — 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Some 45% of Gen Z Say They'd Rather Cut Savings Than Give Up Eating Out — Have Spending Priorities Gone Off Track? originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
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
