Gen Z is struggling financially with low income and higher debt-to-income ratios than Millennials did when they were their age, according to a recent study.
A study from TransUnion, a consumer credit reporting agency, which surveyed 614 Gen Z adults currently between the ages of 22-24, and 623 Millennials who had been between the ages of 22-24 ten years ago, found that Gen Z adults were facing a tougher situation financially that 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. When adjusted for inflation, the income Millennials were making around that time came out to $51,852. This is compared to Gen Z adults during 2023’s Q4 who were making an income of $45,493.
During 2013’s Q4, Millennials were found to have a debt-to-income (DTI) ratio of 11.76 percent, while Gen Z adults had a DTI ratio of 16.05 percent during 2023’s Q4, according to the data.
The survey also found that Millennials’ income after debt-to-income payments had been made was $35,808 during 2013’s Q4. When adjusted for inflation, Millennials’ income during this period was $37,124. In comparison, during 2023’s Q4, Gen Z adults had an income of $40,200 after DTI payments.
TransUnion’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 adults 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 comparison, during the 2023 Q4, Gen Z adults had an average auto loan balance of $21, 767.
This survey comes as recent polls have shown that 48 percent of younger voters between the ages of 18 and 34 have indicated that they would support voting for former President Donald Trump in the upcoming 2024 presidential election, compared to 52 percent who said they would support President Joe Biden.
High interest rates and increasing inflation under the Biden administration have left many Gen Z adults dealing with more credit card debt.