Why Gen Z is feeling so good about money right now (2024)

That was especially true for younger generations — over 60% of Gen Z and millennials said they were optimistic, compared to less than 50% of Gen X and baby boomers.

There's good reason for Gen Zers to be optimistic. The hot jobs market means they have the flexibility to leave their current employment to seek higher wages elsewhere, and they're starting to invest and save for retirement earlier than other generations did at the same age.

Charlie Wise, senior vice president and head of global research and consulting at TransUnion, told Business Insider that "a lot of that optimism comes from a really strong jobs market."

"There are lots of jobs out there for people that want them, and who is often most positively impacted by that is the younger consumers, those consumers who have the flexibility to say, 'If I don't like where I'm working, if I don't like what I'm earning right now, I'm going to walk across the street and probably do pretty well," Wise said.

Despite that broad optimism, rising prices are still troubling Americans. 84% of respondents ranked inflation as a top-three concern, a five percentage-point increase over the second quarter of 2023.

Additionally, per the survey, everyday expenses like groceries, gas, and utilities were top of consumers' minds when it came to rising prices, and the other top two concerns were housing prices and interest rates.

Gen Zers have their own specific worries about high costs as well. Many of them are skipping out of college due to student debt, and high rent costs are hitting a lot of them hard, particularly if they don't have the option to live with their parents or a roommate.

But, Gen Z is outpacing other generations when it comes to wages, retirement savings, and homeownership — giving them reason to feel optimistic about their financial futures amid stressful economic conditions.

"Inflation, while it's still top of mind for a lot of people, it's receded significantly from the levels that we saw back in 2022," Wise said. "

"At the same time, we also see consumers are relatively confident about their financial futures," he added, and that "over a majority of them say, 'Yeah, I feel pretty good about me personally, but man, this inflation thing, this is really weighing on people."

How Gen Z can feel good about themselves — but still worry about high prices

BI has previously reported that many aging boomers and Gen Xers cannot retire or are struggling financially in retirement.

According to a recent report from the Alliance for Lifetime Income's Retirement Income Institute, over half of the "peak boomer" cohort — the final cohort of boomers that will start to turn 65 this year — have $250,000 or less in assets, meaning they'll have to run through their savings and rely on Social Security in retirement.

But when it comes to retirement preparation, Gen Z might be ahead of the game. According to a survey last year from the CFA Institute, over half of Gen Z respondents said they were already investing, and 82% of them started doing so before turning 21.

Additionally, a paper from economists at the American Enterprise Institute and the Federal Reserve found that the typical 25-year-old makes over $40,000 annually, which is more than 50% above what boomers made at the same age, adjusted for inflation.

To be sure, although Gen Zers are making more, they also face financial stressors that older generations did not have at the same age. A Pew report from January found that today's young adults are far more likely to have student debt, and they also have more mortgage debt compared to young adults in 1992.

Overall, the TransUnion report said, Gen Z is "the most stable of any generation" in this year's second quarter, citing 45% of them reporting wage increases in the past three months. But they can still feel worried about broader economic conditions.

"When you look at consumers and their sentiment about their personal finances, when they see wage gains, for a lot of consumers, that to them feels earned. I worked hard, I deserved that. I got that raise because I earned it. Inflation is something that is inflicted on them. It comes from outside of their control. There's nothing they can do about that," Wise said.

"And that's why, even if prices are up 5% and their wages are up 5%, I feel really good about the 5% that I'm making, but it feels like someone just took that away from me in the form of inflation," he added. "And that's got people not just concerned but, in many cases, pretty upset."