May 21, 2024

Gen Z Struggling with Low Income, Higher Debt-to-Income Ratio

According to a recent study, Gen Z struggles financially because of their low income and higher debt-to-income ratio than Millennials did when they were their time.

A survey conducted by Trans Union, a consumer credit reporting agency, found that Gen Z people are facing a more difficult financial position than Millennials did years ago.

The study found that Millennials during the last half of 2013, or Quarter 4 ( Q4 ) were making an income of around$ 39, 394, adjusted for inflation. The money Teenagers were earning at the time, when inflation was taken into account, was$ 51, 852. This is in contrast to Gen Z people who earned$ 45, 493 during Q4 of that year.

During 2013’s Q4, Teenagers were found to have a debts- to- money (DTI ) ratio of 11. 76 percent, while Gen Z people had a DTI ratio of 16. 05 percent during 2023’s Q4, according to the information.

In 2013’s Q4, the survey also revealed that Millennials ‘ income was$ 35, 808 after debt-to-income payments had been made. When adjusted for inflation, Teenagers ‘ money during this period was$ 37, 124. In contrast, during 2023’s Q4, Gen Z adults had an income of$ 40, 200 after DTI payments.

Trans Union’s survey also found that when it came to credit card balances, Millennials had a balance of$ 1, 708, which when adjusted for inflation was$ 2, 248. During 2023’s Q4, Gen Z people had credit card balances of$ 2, 834.

During the 2013 Q4, Millennials had an average auto loan balance of$ 14, 468, which when adjusted for inflation came out to$ 19, 043. In contrast, during the 2023 Q4, Gen Z adults had an average car loan balance of$ 21, 767.

Recent polls have revealed that 48 percent of younger voters between the ages of 18 and 34 would vote for former president Donald Trump in the upcoming 2024 presidential election, compared to 52 % who said they would vote for President Joe Biden.

Some Gen Z adults are now tasked with paying more credit card debt as a result of the Biden administration’s high interest rates and rising prices.