The Hidden Expense That No One Prepped Gen Z for
Written by
Cindy Lamothe
Edited by
Zuri Anderson
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Nobody warned us that adulthood would come with this many surprise fees.
Rent? Sure. Groceries? Expected. But somewhere between logging into our bank apps and wondering where our paycheck disappeared to, a whole new category of expenses quietly moved in — and Gen Z is feeling it the most.
According to McKinsey & Company, Gen Zers don’t feel financially secure but are willing to splurge.
“In working with clients, students and businesses, I consistently see the same category of expense catching Gen Z off guard, not because it is dramatic, but because it is persistent, normalized and rarely discussed in traditional financial education,” said Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at GrowthLimit.
Here’s what experts say the top hidden expense for them is.
The Money Leak You Barely Notice
One of the most overlooked costs that Gen Z is up against is what Shirshikov calls cumulative financial friction.
“This is in the form of transaction fees, subscription creep, convenience premiums and short-term financing expenses that feel small individually but sin at a compounding rate.”
Unlike rent or student loans, he said this isn’t a block-on-a-daily-basis expense that arrives in one bill at the end of the month, making it easy to brush aside psychologically and difficult to take stock of financially.
Convenience Comes at a Cost
According to Shirshikov, digital first spending environments value speed and convenience over thought.
App based services, delivery platforms (think food) and buy now, pay later tools will often build costs through service fees, price markups or delayed interest.
“None of these seem like a lot individually, but add them all up, and savings capacity takes a hit while month to month volatility rises,” Shirshikov noted.
Eventually, he said this volatility is the true cost, as it reduces a person’s margin of safety and their ability to save or invest on an ongoing basis.
Subscription Saturation
“You will see, another facet is the end of subscription saturation,” said Shirshikov.
Everything from streaming services and productivity tools to fitness apps and premium features are built on recurring billing, not value re-evaluation.
Even though they rarely use all of the overlapping services for which they’re paying, he said many Gen Z members have already doled out wads of cash without feeling a thing because money magically transfers itself from one account to another.
“This just quietly increases fixed monthly bills without adding something to your financial security,” Shirshikov added.
Slowing Down the Spend
“Not extreme asceticism but acknowledging the friction,” Shirshikov noted. He recommended reintroducing pauses into spending — decisions that might benefit Gen Z.
“When you’re running a subscription business, auditing subscriptions on quarterly basis and turning off default renewals, along with monitoring effective monthly cost rather than transaction price is key,” he concluded.
For funding, Shirshikov advised knowing the cost of short-term options and really emphasizing stability over convenience can go a long way.
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