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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.