With inflation at a 41-year high, it’s no wonder that millennials and members of Gen Z are very concerned about the current cost of living. A new survey finds that almost half of individuals belonging to these two generations are living paycheck to paycheck — and that nearly a third of them worry about not being able to retire comfortably. While respondents exhibit deep worry about the state of the world, they appear to be fighting to reconcile their desire for change with the demands and constraints of everyday life.
Deloitte’s “Gen Z and Millennial Survey 2022” found that the cost of living — including housing, transport and bills — is the top concern for 29% of Gen Z and 36% of millennial respondents.
Jeanniey Walden, CMO of DailyPay, told GOBankingRates that with nearly half of young workers living paycheck to paycheck, it is no surprise that an equivalent number report burnout, stress and financial anxiety.
“This mental health epidemic has been building for years and is now accelerating with inflation-adjusted weekly earnings down 3.9% in May,” she said. “A distressed worker is a distracted worker and their pain is being felt by employers through losses in productivity, engagement and retention. The Great Resignation has become the Great Rotation as workers job hop to make ends meet. That’s why an increasing number of employers are offering on-demand pay, instant bonuses and customized savings tools to quell the sting of inflation and promote a healthier workplace,” she added.
Deloitte’s survey indicated that concerns about the cost of living may be a symptom of the times, “given high levels of inflation, but they also speak to issues that these generations have been expressing for years: they don’t feel financially secure personally, and at a broader societal level, they are deeply concerned about wealth inequality.”
Analysts Suggest Gen Zers and Millennials Had a Rough Financial Start
Chris Motola, financial analyst for Merchant Maverick, told GOBankingRates that millennials have long been an economically stressed generation, with many having started their careers around the time of the Great Recession.
“The higher raises we’ve seen last year provided some relief, but those gains are quickly being swallowed up by inflation,” Motol said. “Meanwhile, Gen Z is facing an increasing cost of living while entering the workforce and largely working entry level jobs. It’s no surprise that the cost of living is weighing heavily on both generations.”
Indeed, the survey found that 46% of Gen Z respondents and 47% of millennials polled live paycheck to paycheck and worry they won’t be able to cover their expenses. In turn, this translated into a lack of confidence about retirement, with more than a quarter of Gen Zers (26%) and millennials (31%) polled not being confident they will be able to retire comfortably.
Mark Reyes, senior financial manager at banking and savings app Albert, told GOBankingRates that millennials and Gen Zers have witnessed financial traumas and mistakes made by their parents and the generations preceding them.
“They saw how the 2008 Great Recession affected their parents’ jobs, livelihoods, and retirement funds. They are scarred from what they witnessed and shaped by the financial habits that their parents instilled in them,” he said.
Experts Say Gen Zers and Millennials Should Be Realistic and Honest in Their Financial Outlook
Reyes shared some tips as to what millennials and Gen Zers can do to quell their financial concerns. First, he advised younger Americans to set realistic goals and expectations.
“If you are passionate about investing in funds focused on environmentally sustainable choices, realize that those companies may be more susceptible to certain business risks and costs that their less eco-friendly competitors are not,” he said.
Then, he advised, it’s important to understand what’s within your control — and what is not.
“We may not have control over markets, but we do have control over our decisions, like what we decide to purchase and invest in,” he said. “If you are serious about certain causes, research which companies are supportive of those causes and shop there.”
Deloitte also found that three years into the pandemic, levels of burnout are still very high in both millennial and Gen Z cohorts. Nearly half of all Gen Zers (46%) and millennials (45%) surveyed said they feel burnt out due to the intensity and demands of their work environments, the survey notes.
Reyes told GOBankingRates that the best way to prevent burnout is by not reaching that breaking point.
“Take inventory of your feelings, reflecting regularly to understand how and why you may feel burnt out,” he said. He also suggested reviewing your finances to see if you can afford to take time off from work if you need to. Some questions to reflect on, per Reyes: “What are my emotional triggers? What are my financial triggers? What’s my relationship with money? What’s my biggest financial fear? What’s my biggest financial joy?”
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