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The Almighty Buck

Gen Z Americans Don't Have Enough Saved To Cover a Single Month of Spending (fortune.com) 64

Posted by BeauHD from the not-looking-good dept.
An anonymous reader quotes a report from Fortune: Younger Americans don't have enough saved to cover a single month of spending, showcasing their vulnerability should the economy head into a downturn. Members of the Gen Z generation -- people born after 1995 -- were spending twice the amount they had in savings on average in February, according to Bank of America Institute analysis of internal account and card data released Friday. The ratio has increased in the past two years, and is much higher than for other generations. In part that's because Gen Z consumers, many of whom still hold entry-level positions and make less than their older peers, tend to spend a bigger share of their incomes on necessities including rent and utilities. But they're also more likely to shell out on discretionary categories like travel and entertainment. Spending in non-essentials among that cohort is up more than 25% from a year ago -- substantially above the overall rate.

While the report noted that Gen Z workers are still garnering robust pay gains compared to older groups, it showcases a point of vulnerability as households' views of the economy dim. [...] The Bank of America report also pointed to a worsening labor market for younger Americans. The number of Gen Z households receiving unemployment benefits rose by nearly a third in the past year -- the most of any generation. It also noted that, with underemployment on the rise, that could have long-term career effects for that cohort.

Gen Z Americans Don't Have Enough Saved To Cover a Single Month of Spending More | Reply

Gen Z Americans Don't Have Enough Saved To Cover a Single Month of Spending

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  • Wrong target (Score:5, Insightful)

    by Going_Digital ( 1485615 ) on Friday March 14, 2025 @08:26PM (#65234693)
    The problem is simply the excessive cost of living. People who are older now, were once young people on low wages, but they managed because the cost of living was affordable. The problem is caused by the wealth gap getting wider, billionaires extracting money from the economy, forcing ordinary people to spend the majority of their income on the basics, leaving no money to save.

    • Re: (Score:1, Troll)

      by rsilvergun ( 571051 )
      I'm sure it's just all the avocado toast and coffee lattes. Also somehow trans girls in sports but I haven't quite figured that one out yet. I need to watch more Fox News...

      • it always amazed me that putting guacamole on bread somehow became a symbol of extravagance

        • it always amazed me that putting guacamole on bread somehow became a symbol of extravagance

          Well, thanks to Trump's tariffs, it actually is one now.

        • In Australia and avocado is extremely expensive because they have to be flown in of course. The right wing is globally organized so they hammer the same talking points everywhere. Right wing provocateurs like Ben Shapiro, Tim pool and Jordan Peterson attend yearly conventions where they literally get told exactly how to push people's buttons by experts who study The material and figure out what works. There's a very strict command structure.

          Remember all that brouhaha over Bud light? The reason that blew

        • Went to the local Roche Bros this afternoon. Avocados were $3 each. Weren't that much cheaper before bad orange man tariffs either.

        • Re: (Score:2)

          by MrKaos ( 858439 )

          it always amazed me that putting guacamole on bread somehow became a symbol of extravagance

          Smooshed avo on toast is delicious. Ironically avacado in a smoothie shouldn't taste as good as it does, but it does.

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          It's not even guacamole. That's got salt and lemon juice.

      • The avocado toast is not the reason.

        But it is a symptom. For the complete lack of interest up to outright refusal or denial of your overall financial situation. Most people don't even have a rough estimate of monthly expenses vs. income. They know that skipping the daily latte won't buy them a house - but they do not know that it would pay filling up their car once. So they don't realize that that anxiety attack when the reserve light comes on two days before the next paycheck is totally optional. And you w

      • Avocado toast was millennials. Imagine not being able to tell entire generations apart lol.

    • Totally. Suppose the all lived on instant coffee and Ramen noodles, then they would be yelling about collapsing consumer spending, which they already are:
      https://www.msn.com/en-us/mone... [msn.com]
      The money is just not with them, it is with billionaires.

    • It isn't costs and wages it is the portion of the economy's good and services that we leave for Gen Z. There is a fixed amount of housing that becomes available each month. If you doubled Gen Z's salaries, 100% of that increase would go into their rent. We distorted the entire economy so that retired people can quit working and live the same lifestyle paid for by various direct transfers to them from the young and the fact that their homes are so insanely over valued. Homes that will straddle a young pe

      • We distorted the entire economy so that retired people can quit working

        No, we distorted the economy to concentrate wealth and power. We have a tax system where Bill Gates donates a million dollars and a third of that is taken off his taxes. Since his donation doesn't reduce government spending, the rest of us have to pay more taxes to make up for the taxes Gates isn't paying. Taxes are like dividing the bill at lunch, if one person pays less everyone else has to pay more. Or you can order one less pizza and everyone else pays the same amount for a smaller share.

        And its not jus

      • Don't get me wrong we have a lot of retirees who are buying up houses. About a quarter of the houses in any place you can actually live and work are going to be owned by small or mid-sized investors. I had been wondering why it was that the big boys like Black Rock had relatively small holdings but so much of housing is now owned for rent, and the answer is tons of baby boomers who didn't really have enough money to retire but did have some savings used it to buy up houses to rent out.

        Also we don't look

    • Re: (Score:2)

      by Dusanyu ( 675778 )
      how are they extracting it out of the economy? People are willingly GIVING it to them Every time you shop on amazon or use any of the tech products owned by them you are willingly handing your money over. The billionaires are our creation and we can destroy them by shopping local.

      • The billionaires are our creation and we can destroy them by shopping local.

        No, we can't. This is one of those "If everyone would just ..." solutions that is pure fantasy because we lack the means to get everyone to do anything. Amazon does not lack the means to get people to enrich them. Your local business just can't compete with Amazon's marketing budget.

    • Gen X here. When I was in my 20's, we couldn't afford restaurant food, either dine-in or takeout, and we certainly couldn't pay extra for delivery, except for an occasional pizza night. We made ends meet by cooking for ourselves, or resorting to packaged ramen when we had to. We didn't have fancy $1,000 phones in our pockets that we replaced every year. The cost of living back then was more affordable because we didn't spend as much on things Gen Z-ers take for granted.

      No, I'm not buying the sob story. When

      • I'm an old man and food was substantially cheaper back then. On paper it wasn't. If you just picked up a grocery store mailer food looks like it cost about the same or maybe slightly more. But in practice you had much much steeper discounts because there was a lot more competition going on. And you also had tons of things being clearanced. Back in the day when something was about to go bad they cut the price on it by 50 or even 75%. Now they just throw it out so they can maintain higher prices.

        Hell as a k

  • It takes a while to save a useful amount of money. You put aside a little each month, and it grows to a healthy amount after decades. While you are still working an entry level job (according to the summary -they are) you are not going to have much saved.

    They are in their 20s. None of us had much saved at that age. I think I still had 3-4 roomates.. and was making wonderfully smart life choices /s

    • The average is 21 but the maximum is 28. Generations exist for marketing purposes and Gen Z is a fairly long generation because we don't change up styles and pop music and such as often as we used to.

      There are plenty of Gen Z who have had plenty of time to have saved money if they had real jobs. The problem is we've been automating factories and dozens of forms of blue collar labor while increasing productivity for white collar labor and bringing in tons and tons and tons of immigrants who are often pai

      • The structural problem in our society isn't that a small number of people are seemingly spectacularly rich with little effort. The structural problem is that way too many people get fed a story saying that it's possible for *everyone* to be spectacularly successful with seemingly little effort.

        Why bother learning to read and write when machines do it for you? Why bother to add and subtract when you have a calculator? Why have money in the bank for a rainy day when government will pay for free food, free med

        • I'm ok paying taxes to fund government programs that keep poor people from starving or provide medical care to those who could not otherwise afford it.

          We live in a society. Poverty shouldn't result in death or untreated illness. There but for the grace of God go I, and all that.

      • We will be like Russia where we have fake elections and anyone that speaks out gets arrested and sent to camps or thrown out of windows.

        What makes you believe any of that? The answer is you have been brain washed. And if you ask Russian they will tell you that. Because they have been brainwashed. The world is run by the people who control and manipulate the flow of information. Which is why people are worrying about immigrants and trans participation in sports.

        Instead of worrying about an expensive health care system that produces lousy results with the most deaths from COVID of any country in the world. An expensive retirement system that

    • Re:Give it time (Score:4, Informative)

      by dskoll ( 99328 ) on Friday March 14, 2025 @09:01PM (#65234755) Homepage

      No, things have definitely changed. I bought my first house when I was 26 years old. The price was roughly 3.3x my annual salary.

      In Canada (cos that's where I live), that's now a sad, sick joke, with houses costing something like 8x to 10x the average annual salary, and probably 20x to 40x annual entry-level salaries.

      The kids are being ripped off even as the oligarchs and tech bros enrich themselves obscenely.

      • It depends a lot on where you live. I'm in the midwest united states. "Bought" (scare quotes due to mortgage) my first house in 2017 at age 29, 2.25x annual salary, 3.5% loan. I was making well below market rate for my profession at the time. Just paid off the loan last year.

        Granted, I live alone, single, no kids. 1000 square foot house in an ok city, working as an engineer.

    • Re: (Score:2, Troll)

      by ClickOnThis ( 137803 )

      From TFS:

      Younger Americans don't have enough saved to cover a single month of spending, showcasing their vulnerability should the economy head into a downturn.

      This is not about savings in general that grow over decades. TFS is talking about an emergency fund that can keep you solvent if you have an unexpected event, like losing your job. A good rule is to have from 3 to 6 months of your expenses in accessible savings. That's the first savings objective anyone should have. Then everything else follows: contributing to a retirement account, saving for luxury items, trips, etc.

      If you can't pay your student loan, rent, and household bills and still have mone

      • All good points.

        Some of this might be down to lack of financial literacy. Millennial here, and I did all of this in the wrong order. No emergency fund the first 9 years out of grad school, paid off a 3.5% mortgage in 7 years just because I wanted to see the amount owed go down, only contributed a little more than required to get 401k match.

        Started reading about finances after paying off my house (what do I do with this money?), and I'm really kicking myself for not reading about this stuff earlier. Never

        • It's not entirely a bad thing to pay off your mortgage early. But, as you discovered, there are better ways to handle your money. The extra that you put towards your home loan could have earned much more than 3.5% in the stock market. And the mortgage interest is deductible, so the net cost of borrowing that money is lower than a loan for something else.

          TL/DR: don't be in a hurry to pay off your home loan if you have a better place to put the money.

          Outside of your 401(k) I'd consider something more aggressi

          • Ah, should have specified, I'm using the Series I savings bonds. They're indexed to inflation, and the current ones pay 1.2% real on top of inflation. The beautiful thing is they can be redeemed at face value after 1 year and are not marked to market. I'm working to save 4 years of expenses in those, kind of as FU money if I want to go back to school for something else. Recently inherited some money; some of that is going to this, as is a part of my income, but I put more in the 401k.

            401k and Roth IRA a

            • I'm working to save 4 years of expenses in [Series I savings bonds], kind of as FU money if I want to go back to school for something else.

              Fair enough. How you invest depends on what you need the money for, and the time-horizon.

              If you want to use the bonds for several years of school, consider a bond ladder. [investopedia.com] I'm not sure whether a 529 plan is relevant, but you might want to check that out also.

              • Series I bonds can be redeemed for their book value any time between 1 year of holding and maturity at 30 years, so I don't need to ladder them. Interest compounds tax deferred, is always state tax free, and it is totally tax free when used for qualified educational expenses within certain parameters.

                A 529 plan is a good thought, but I also don't want to lock myself in to using this money for education.

    • I got my first job 18 years ago. It paid 60k/year. Just enough to cover a 1200/mo rent, pay off my car loan in 1 year, and keep me fed and clothed.

      Somehow between being a good little worker drone, not pissing away my money on frivolities, and marrying a woman who was also a good little worker drone who didn't piss her money away on frivolities, we managed to cough up a 300k down payment just before the covid hit, with more than enough left over for household repairs and contingencies.

      The combined banks of m

      • What a wasted life.

      • Re: (Score:2)

        by dskoll ( 99328 )

        Yeah. The pattern is you were lucky and privileged to get a $60K entry-level job, be born at the right time, and have bank of Mom and Dad available to pitch in.

      • got my first job 18 years ago. It paid 60k/year.

        You do realize $60,000 is far above the average wage in the United States? Much less the average wage of someone just starting out.

        marrying a woman who was also a good little worker drone

        The adage that two can live as cheaply as one is almost true. Finding a life partner to share the costs is a huge advantage. At least until you have children.

        • Re: (Score:1)

          by russty ( 7398610 )

          $60000 is almost exactly average wage today. ~150% of average wage 18 years ago.

          • $60000 is almost exactly average wage today. ~150% of average wage 18 years ago.

            I was thinking median compensation since my point was most people don't make $60,000. In 2023 the median was $43,222.81 according to the Social Security Administration. That was 187% higher than in 1991. The average for 2023 was $63,932.64, 206% higher than 1991. In 1991 the ratio of median to average was 72%, it was only 67% in 2023.

    • Right. Hopefully they're living below their means, saving that little bit each month, and staying out of debt.

    • They are in their 20s. None of us had much saved at that age. I think I still had 3-4 roomates.. and was making wonderfully smart life choices /s

      I bought a condo at 26.
      I moved out in 1976 as an 18 y/o. I lived alone in my own apartment in a minimum wage job. Put myself through college, got better jobs, etc etc etc.
      Kids today can't do that. College costs too much. Housing costs too much.

    • While that's meant as a joke, hunting a stray dog is considered "living off the land". Remember the organizational hit that the Environmental Protection agency just had? That means that dogs, birds, rabbits, deer, or whatever else you care to name that's living just as desperately in the woods are all going to get a little more chemically unclean. The same for grown-yourself produce. The pollution is already bad. We can't go back. We can't live where we are now because the rent is too high. There's no way f
  • I don't think I had a month worth of expenses in savings for much of my youth. There are plenty of people of all ages who don't now. This is a class issue, not a generational change. Poor and lower middle class people are mostly in debt, they have no real savings.

  • I like having 6 months' salary in the bank, but it wasn't actually a thing for me for a LONG time. Now I have enough to retire above the poverty line and maybe - if nothing goes wrong - to maintain something close to my middle-class lifestyle until I die.

    Having four weeks pay in the bank? If you're 'young' (I'd say under 30), that is already AWESOME, especially in this economy. Lots of people live their entire lives on next week's pay, forever giving up a percentage to the credit card companies or worse,

    • just show up at the ER with an fake ID they can't trun you away or can they force you to give your real name.

  • It's always been a bad idea. It's just more fashionable today.

    It has nothing to do with the cost of living. When I was starting my adult life in the 90's, we made do by getting roommates and not eating out (or getting food delivered). We didn't spend large amounts of money on phone plans or phones.

    What we knew, what we had been taught, is that you don't spend everything you make, and you put some aside for a rainy day. That principle hasn't changed.

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