For many millennials and Gen Zers, financial security remains out of reach — even as their net worths grow on paper.
“We’re living in two separate economies,” said Freddie Smith, an economics content creator who talks about the different financial realities between generations. “The middle class, unfortunately, is dead for millennials and Gen Zers. Or, best-case scenario, the goalpost has just moved and it’s still obtainable, but you have to make over six figures to have that middle-class life.”
Rachel Schneider, CEO of emergency payment fintech company Canary and co-author of “The Financial Diaries,” describes a large portion of Americans as living “at break even.”
“Over the course of the year, they might make enough money to pay for basic living expenses and cover their bills, but if one major thing happens then they can get behind,” Schneider told CNBC.
Meanwhile, costs keep rising. Housing, health care, and insurance have all become more expensive. Additionally, unlike decades ago, Americans now bear more responsibility for funding their own retirement.
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Despite older Americans’ criticism of younger generations for lifestyle inflation, many experts argue the problem is structural, not behavioral.
“It’s a lot harder for young people today to save up for markers of the American Dream than it was for previous generations,” said Joanne Hsu, director of the University of Michigan’s Surveys of Consumers and a research associate professor.
“People often feel a lot of shame and distress when their financial lives are not going smoothly,” Schneider said. “And yet, a lot of what they’re experiencing is not the result of anything that they have done or could have done differently.”
As traditional markers of success slip further away, young American adults are adapting. More are living with their parents longer, sharing child care across households, and looking for new ways to build community.
Watch the video above to learn more about why “making it” feels impossible for so many young Americans.