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5 Ways Gen Z is Unique When It Comes to Personal Finances

Garret Geitner Updated: June 27, 2023 • 4 min read
Gen Z finances

Gen Z refers to individuals born between 1997 and 2012, currently aged between 11 and 26 years old. This generation is known for making a significant impact on society, from changing the outcomes of key elections to emphasizing the importance of maintaining a healthy work-life balance. One area where Gen Z stands out is in how they handle their personal finances, and we'll take a closer look at the ways they are unique in this aspect.

1. Leading the side hustle economy

From the pandemic, to inflation to the housing crisis, Gen Z has not entered the easiest financial environment. Even while working full-time, many people found themselves taking on more and more debt each month as prices of basic necessities continued to rise.

That is where the side hustle economy really started to boom. From driving for Uber, operating a drop-shipping business, or being a social media influencer, people became more actively engaged in the side-hustle economy.

According to recent data, Gen Z makes up the majority of the 44% of Americans participating in the side-gig economy.

Read more: 22 Small Business Ideas and Resources for Teens.

Gen Z side hustles

2. Limited knowledge of credit

According to a survey conducted by FICO, Gen Z has the lowest levels of credit education when compared to Millennials, Gen X, and Baby Boomers. On top of that, it is estimated that 29% of Gen Zers don’t have a credit score or even know if they have one. Less than half of Gen Zers say they completely understand their credit scores.

Since eighteen is usually the minimum age for applying for credit cards, it's no wonder that many in this generation haven't yet utilized credit. In order to start building up their credit scores, young people can have a parent participate as a co-signer on a credit card application. They can also consider credit-builder credit cards to start out.

3. Taking on higher amounts of debt

With rising costs not keeping up with wages, more Americans have turned to credit cards to pay for everything from groceries and entertainment to medical bills, and even rent.

When it comes to Gen Z, the good news is that approximately 98% of adult cardholders are making at least the minimum payment on time each month. The bad news is that overall credit card debt for these young adults is on the rise.

Increasing overall debt combined with record-high interest rates can spell trouble for Gen Zers down the road.

Only making the minimum payment each month may be good for your credit score, but it can quickly snowball to 10s of thousands of dollars over a few years if spending habits are not curtailed and debts are not paid.

4. Finding challenges adapting to the workplace

When it comes to personal finances, one of the most important components is maintaining consistent employment.

After the pandemic, more Gen Z Americans were entering the workforce at a time when people were just starting to return to the office. Many managers from older generations started to take notice of some of the big differences between working with Gen Z when compared to working with Millennials and Gen X employees.

According to a survey of 1,344 managers and business leaders conducted by ResumeBuilder.com, around 74% believed that Gen Z employees were more difficult to work with than other generations.

As a result, 65% of these managers found that they needed to fire Gen Z employees more frequently than employees of other generations.

This can be problematic for both employees and employers. Employees need to maintain gainful employment to pay bills and build savings, while employers need to have enough employees to run a business.

Although compromises need to be made from both sides, Gen Z employees may need to work hard to adapt to the work force, whether it's work-from-home, hybrid, or in a traditional office setting.

Gen Z credit scores

5. Unable to achieve significant savings

With rising costs and stagnant wage growth, many Americans including Gen Zers, are seeing emergency funds disappear, an increase in credit card debt, and a lack of retirement contributions.

This three-pronged combination could lead to some devastating consequences, especially for younger adults entering the workforce.

For example, a 22-year-old worker who starts investing $5,000 a year in a 401k or IRA earning on average 8% interest annually can save approximately $1.295 million by the age of 62. The same worker who waits until they are 32, may only save $566k by the time they are 62. That is an incredible difference of more than $728,000.

What's on the horizon for Gen Z's finances?

Gen Zers are in a unique position to take advantage of the side-hustle economy and e-commerce boom to establish successful side businesses and add to their overall lifetime earnings.

The main things that you should consider if you are a young professional starting out in the workforce is:

  • Educating yourself on personal finance topics like credit scores
  • Paying off your credit card in full each month
  • Building your savings
  • Start contributing to retirement early


Having cash on hand can help you avoid taking on future debt during economic downturns such as the possible upcoming recession. This can help ensure you weather any market volatility and that you are left in the best financial situation down the road.

Written by Garret Geitner linkedin-icon

Garret Jacob is an experienced financial writer with experience covering topics in the mortgage industry, personal and business loans, real estate and more. Earlier in his career, Garret spent 13 years working in the supply chain and logistics industry.