Gen Z buying power has risen with investing, job-hopping growing wealth

Gen Z buying power has risen with investing, job-hopping growing wealth
Youngest cohort of American adults are focused on financial security.
NOV 19, 2024

America’s youngest adult generation is focusing on building wealth and the past year has helped them with a boost in their disposable income.

An analysis of millions of data points from tax filer clients of H&R Block paint a picture of economic mobility across generations, with 66% across income levels and generations showing optimism about their income growth, retirement prospects, and ability to maintain financial stability, despite the threat of unmanageable debt.

The firm also used 25 years of tax return data to spot long-term trends and make comparisons between generations.

It found that each generation has improved on the income and buying power of the last and this is reflected in the sentiment of generations with each believing they will exceed their parents’ economic opportunities – 70% of Gen Zs said so along with 65% of Millennials and 60% of Boomers, although notably this falls to just 53% among Gen Xers.

Specifically on buying power, Gen Zs have 30% more than Millennials did at their age, and Millennials have 30% more than Gen Xers did at their age. Gen X is enjoying 20% more buying power than Boomers did at the same age.

Debt remains a major issue though with Gen X carrying the most credit card debt (55%) followed closely by Millennials (49%), Boomers (47%), and then Gen Z (39%). Gen Z feel the most burdened though, as shown in another recent survey.  

Two in three who have credit card debt say it’s at an unmanageable level. Meanwhile, as many as one in six hold student debt with more than a third saying it’s more than they can manage.

FOCUSING ON GOALS

Gen X is the most likely to be “not at all confident” that they are doing what is needed to meet longer-term goals, such as saving for retirement.

But younger generations are making some significant choices on how to spend their money, or not, with almost 17% of Millennials identifying as ‘double income no kids’ in 2024 compared to just 7% in 2015. Given that it’s estimated to cost almost $240K to raise a child to 18 (according to a LendingTree report) this frees up a lot of cash.

Gen Z is going a few steps further to maximize their wealth including job-hopping for salary increases and side hustles to augment their income. More than half plan to monetize their hobbies in the next year.

This youngest generation of American adults are prioritizing financial goals including buying a home (63%) and saving for retirement (86%), and investing is a key focus with 41% contributing to employer-sponsored plans, 22% using cryptos, and 15% opting for gold and silver. The report found that they are also twice as likely to invest in fine art and collectibles than Millennials (9% vs. 4%).

Latest News

Trio of advisors switch for 'Happier' times at LPL Financial
Trio of advisors switch for 'Happier' times at LPL Financial

Former Northwestern Mutual advisors join firm for independence.

Indie $8B RIA adds further leadership talent amid growth drive
Indie $8B RIA adds further leadership talent amid growth drive

Executives from LPL Financial, Cresset Partners hired for key roles.

Stock volatility remained low despite risk events
Stock volatility remained low despite risk events

Geopolitical tension has been managed well by the markets.

Fed minutes to provide signals on rate cuts
Fed minutes to provide signals on rate cuts

December cut is still a possiblity.

Trump's tariff talk roils markets, political leaders
Trump's tariff talk roils markets, political leaders

Canada, China among nations to react to president-elect's comments.

SPONSORED The future of prospecting: Say goodbye to cold calls and hello to smart connections

Streamline your outreach with Aidentified's AI-driven solutions

SPONSORED A bumpy start to autumn but more positives ahead

This season’s market volatility: Positioning for rate relief, income growth and the AI rebound