Why Gen Z Has It Harder — And What to Do About It

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.Author Beth Kobliner says today’s young adults face unique money challenges that call for unique advice.“For millennials, it was the Great Recession of 2008 and the housing crisis. For Gen Z, it’s Covid, AI and major economic change,” Kobliner says.And while she acknowledges that every generation thinks they face the biggest challenges, Kobliner says the current generation of young adults can legitimately stake that claim. “I can definitely say that Gen Z has it harder than any generation I’ve written for,” she says.Kobliner has dedicated her career to promoting financial literacy through books, school curriculums and even a segment on “Sesame Street” with Elmo. Now, she’s released an updated version of her bestselling book, “Get a Financial Life: Personal Finance in Your Twenties and Thirties” with the goal of reaching a new generation. The book is NerdWallet’s summer Book Club pick.Kobliner is determined to help young adults navigate today’s obstacles so they can still come out ahead. I spoke with her about these top takeaways from her new book.Get creative with your job searchIt’s no secret that the job market is difficult for new grads.“Entry-level jobs have been facing a tough time,” Kobliner says. She adds that companies want people with experience, and they’re leaning on AI for lower level tasks. To overcome the odds, she suggests something her father used to recommend: Reach out to your network and ask for information interviews. You can call on alumni from your college and others in your broader network, even if it’s just to request a 10-minute chat. Ask about ways to get ahead and stand out in the resume-development and interview process.“It’s getting harder to stand out so we have to be more creative and use a more personal approach,” she says.Think outside the housing boxIf you’re a recent college grad, seriously consider moving back home for a year or two, Kobliner says. You could save on rent, food and laundry costs. More young adults move back home than in the past, so there’s less stigma around it. When you’re ready to move out, Kobliner urges people to consider using a rent vs. buy calculator to help decide what makes the most sense for you. Renting often wins out because of all of the costs associated with buying, she adds.For young adults who want to own, she urges them to look at state and community programs that make buying more affordable, especially for first-time home buyers. Steer clear of high-risk financial behavior What’s considered risky financial behavior? Kobliner gives three examples: accruing credit card debt, online gambling and going without health insurance.“Pay off your high-interest rate credit card debt so you are not constantly losing money,” Kobliner says. Likewise, online gambling, sports betting and prediction websites are sucking up a lot of money from Gen Z, she adds. A NerdWallet study published last year found that 20% of Americans have bet on sports and almost one-third (31%) of sports bettors view gambling as an investment.For health insurance, Kobliner encourages young adults to stay on their parents’ plan until age 26, if possible. After that, getting on a workplace plan is ideal, or you can explore the health insurance marketplace. Having health insurance helps to minimize the chance of financial distress due to a medical emergency. Lean on technologyAutopay makes it easy to pay bills on time. When you do, you avoid debt, strengthen your credit and open access to more appealing financial products.“A higher credit score lets you qualify for lower rates,” Kobliner says.She recommends taking advantage of tools like automatic bill pay through your bank to ensure you never miss a payment on a bill coming due. You can use the same tools to make saving and investing automatic each month as well. Embrace the power of compounding Making consistent contributions early in life can go a long way.While using compound interest to grow savings and investments over time isn’t a new concept, it’s still an important one, Kobliner says. She encourages young adults to consider a high-yield savings account for short-term savings. If you have a job, put at least 10% of your paycheck into a 401(k) retirement account for long-term savings, especially if you get a company match, she says. “That’s an immediate 100% return on your money.”Kobliner says readers often thank her for introducing them to the power of compound interest. In fact, she says it's the most common comment she’s gotten in her 35 years of working in personal finance. “It might not sound glamorous immediately, but saving money over time is a key to getting a healthy financial life. And as a young person, you have time,” she adds. How to enter NerdWallet’s Book Club giveaway