Why Gen Z Is Spending More on Bills Than Millennials Did at the Same Age

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Today, Gen Z is spending more on bills compared to their slightly older counterparts did at their age. Young adults are generally beginning their careers with more debt and a higher cost of living than millennials did and it’s costing them big.

From coming of age during a global pandemic to facing high inflation and an out-of-reach housing market, the world’s newest adults have an uphill battle when it comes to finding financial stability.

Here are the reasons why Gen Z is spending more on bills than millennials did at their age. 

Higher Cost of Living

Gen Zers are undoubtedly burdened by a higher cost of living than millennials faced when they were their age. Food prices alone have soared 20% or more in the past four years. According to The Guardian, food prices increased 22% between 2019 and 2024. 

Additionally, Gen Z is facing a housing crisis. Rising rent and home prices have forced the generation to stay at or return home after graduating college. Data from the U.S. Census Bureau found that young adults are more likely to live at home compared to most older generations at their same age. As reported by the survey, over 50% of men and women between the ages of 18 to 24 lived in their parents’ home.

More Debt and Less Savings

Gen Z may also be paying more in bills because of insurmountable debt. The generation has faced student loans that can take decades to pay off. A 2024 quarterly report from the New York Fed’s Center for Microeconomic Data found that the generation had the highest percentage of credit card debt. Credit card users in the cohort are also more likely to have maxed out their credit cards or used a larger amount of their credit limit. 

According to Forbes, Gen Z also has the largest percentage of people with savings of less than $1,000. Only 10% of the generation has between $5,001 to $10,000 saved, meaning that a good portion of the age group would be unable to afford a layoff or other financial emergency. High debt and low savings has combined to make it challenging for Gen Z to start an emergency fund or invest money for the future. 

Economic Instability

Another obstacle for Gen Z, which may make it more difficult for them to pay down bills, is the economic instability they have faced throughout their lifetime. Not only did the generation live through the Great Recession of 2008, they also saw financial uncertainty caused by the pandemic and an unpredictable economic future. The roller coaster has undoubtedly left Gen Zers reeling and less able to establish stability when it comes to their finances. 

Lower Wages

Finally, Gen Zers have a lower income compared to millennials at their same age. Research from TransUnion found that Gen Zers between the ages of 22 to 24 had an average income of $45,493, while millennials at the same age made $51,852 when their income was adjusted for inflation. 

The study also showed that the generation’s debt-to-income ratio was significantly higher compared to millennials. When all debt was included, Gen Z had a debt-to-income ratio of 16%, while millennials was significantly less at just under 12% when they were 22 to 24 years old in 2013. 

The Perfect Storm

Unfortunately for Gen Z, the road to a stable financial future is rocky at best. A perfect storm of high inflation, rising cost of living, large debt, and lower wages makes it challenging to pay bills and find firm ground. 

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