Recent studies indicate that although one in three Americans regularly lives paycheck to paycheck, women and Generation Z, specifically individuals aged 18 to 28, are facing the highest levels of financial stress at this time.
Stagnant wages, increasing student loan debt, and the gender wage gap all contribute to financial generational divides, a Credit One Bank survey of 1,000 American adults released Tuesday found.
Recent studies have shown that under 10% of Americans received any education on personal finance during their schooling years. However, it appears that younger generations are more inclined to have discussions about money with their parents compared to Generation X individuals, who are currently between the ages of 45 and 60, as well as Baby Boomers aged 61 to 79. Nevertheless, Credit One Bank found that over half of Generation Z steps into adulthood without any formal training in financial literacy.
“In a statement, Credit One Bank's Chief Credit Officer Steve Min highlighted, ‘This survey uncovers a significant connection between increasing concerns over personal finance and the insufficient level of fundamental financial education throughout various generations. This information aids us in gaining insights into the broader consumer demographic and how we can enhance our efforts to provide improved financial education.’”
View pictures in App save up to 80% data.
At what age or stage did each generation start managing their own financial responsibilities?
The survey found the same amount of Baby Boomers and Generation Z - 89% - began managing their own bills before age 24. However, a stark difference exists between how the two groups learned about personal finance. Almost half of Baby Boomers reported that they taught themselves in comparison to only 11% of Generation Z, a majority of whom said their parents taught them.
Within Generation X, 87% began taking charge of their finances before reaching 24 years old. In contrast, Millennials, those aged 29 to 44, tended to take financial control a bit later; 79% reported managing their bills by age 24, while another 15% did so by age 30. The survey revealed that roughly half of both Generation X and Millennials attributed their knowledge of personal finance to lessons learned from their parents or family members.
Different generations hold varying opinions on the concept of debt and its perceived normalcy.
About one in three Americans across generations reported they have a "significant" fear of debt, but half of Generation X participants said it was "a normal part of life."
This marks a significant rise compared to the 35% of Baby Boomers who reported perceiving debt as a normal part of life based on their familial experiences during childhood.
Just after Generation X, 48% of Millennials indicated that they consider debt to be a typical aspect of life.
Generation Z participants deviated from the pattern, showing a greater alignment with Baby Boomers' views. Just 39% of the youngest demographic surveyed indicated that they perceive debt as a typical aspect of life.
How does financial stress vary across different generations?
Each generation agreed their top barrier to financial stability is the high cost of living in the United States, which can contribute to stress.
Over different generations, 48% of women indicated experiencing stress and anxiety regarding their financial situation, compared to 38% of men. The findings from the survey imply that this disparity may stem from the fact that women generally earn lower wages than men. It was noted that "households where women are the main income providers possess only 55 cents of wealth for every dollar found in households with male earners."
According to the survey, 59% of Generation Z, the highest percentage among all generations, indicated that they experience stress and anxiety. In contrast, Generation X emerged as the group with the least confidence in their financial situation. Meanwhile, just over half of Millennials expressed financial-related stress and anxiety, whereas only 29% of Baby Boomers reported similar feelings.