Gen Z gets a lot of heat for everything, from cancel culture to iced coffee obsessions. But when it comes to money? The truth is a little more complicated.
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While this generation is breaking taboos around talking openly about finances, there are still a few habits that might be quietly draining your bank account. No shame here — we’ve all been there.
Here, we break down some of the worst money moves Gen Z is making — and more importantly, what to do instead.
Living Paycheck to Paycheck
According to Martin Lynch, president of Financial Counseling Association of America (FCAA), Gen Zers’ biggest mistake is living from paycheck to paycheck, which he said is the case for roughly 60% of Gen Z –higher than for other age groups.
“Everyone wants to be paid more, but with the nation’s economy in a state of flux, it’s time to make adjustments and live within your means,” Lynch advised.
That means creating a detailed, accurate budget and making reductions to live within it. If you’re unsure how to create a budget, Lynch recommended contacting an FCAA credit counselor.
They’ll show you how to do it for free. (And a good counselor won’t judge your budget or dictate what reductions are in order. You have to learn to make those decisions for yourself.)
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Uncontrolled Subscription Creep
Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at GrowthLimit, noted that one of the most toxic issues he sees in Gen Z is uncontrolled subscription creep.
“Younger consumers with the tap of a finger are piling on streaming services and food-delivery apps and niche wellness platforms, and they don’t know what their next renewal date is until that next bank alert,” according to Shirshikov.
He said all of that comes to a head when you add in that occasional expense, since over a year, those $5 to $10 monthly fees can turn into a wallop of $200 to 400, yet those amounts never hit the budget.
So, what’s the antidote? In addition to the typical budget template, Shirshikov suggested a quarterly “subscription sprint audit.”
Basically, you set 30 minutes aside each quarter to list every recurring charge — cancel if it doesn’t serve you and renegotiate when you can.
Then add in there a digital-envelope system in a micro-banking app — where you allocate set dollar amounts to spending categories such as “fun,” “food” and “subscriptions.”
“When there’s no more money in each envelope, the app just says no more spend,” Shirshikov added.
Avoiding Managing Student Loans
Another mistake Lynch has observed is that many Gen Z borrowers avoid managing their student loans. According to Nasdaq, Gen Z has an average payment that’s $100 higher than millennials.
“We speak to lots of young people who have not buckled down and learned how to manage their loans in a way that makes sense for both their current circumstances and their long-term goals,” Lynch said.
He noted that the Trump administration’s “Big Beautiful Bill” will change student loan repayment for new borrowers starting next year, but people who’ve already taken out student loans, especially those on the SAVE plan, need to learn about the options still available to them now.
Not Saving Today
According to Lynch, Gen Zers need to start saving today.
The gig economy has made income less predictable, for sure, but that actually makes creating an appropriate emergency fund even more important, not less.
And it doesn’t stop there. Young consumers need to start contributing to savings plans, such as Roth or regular IRAs, or 401(k) plans if their employer offers one.
“The sooner you start, the easier retirement will be,” Lynch said. “And fear not, Gen Z. If you start saving today, you will be able to retire someday.”
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This article originally appeared on GOBankingRates.com: 4 Worst Money Habits Of Gen Z — And What To Do Instead
