Young Adults Carry Higher Debt Than Previous Generation

Gen Z consumers hold 12% more debt than they did one year ago, according to data from credit bureau TransUnion. The figures show that young adults today carry a heavier financial load than Millennials did at the same age, even after adjusting for inflation.

Ted Rossman, a credit counseling expert with the nonprofit Money Management International, said the agency has observed a 35% rise in requests for help from Gen Z clients over the past 12 months. He attributed the trend to the combined weight of student loans, rising rent, and the popularity of buy now, pay later financing options.

Rossman noted that these expenses hit hardest during the early years of household formation. “Those household formation years are very expensive, so GenZer’s actually have more debt than Millennials did at the same age, even adjusted for inflation according to TransUnion,” he said. Many young adults are now living paycheck to paycheck with little room for savings.

The credit counselor advised clients to start by tracking their budgets and monitoring buy now, pay later spending. While these plans can offer short-term benefits, Rossman warned that they remain a form of debt. “It’s not a free lunch,” he said. “Even if it’s that 6 weeks of interest free payments you’ve got to make a payment now and another one in two weeks and another one in two weeks, just need to be careful that you’re not overspending.”

He also pointed out that interest rates on credit card debt often reach the 20% range, adding to the cost of borrowing. For those who feel overwhelmed, Rossman said individuals can reach out to credit counseling agencies for assistance. The data underscores the current financial pressure on Vermont’s young workforce as they navigate entry into the job market.

The findings are based on TransUnion data cited by Money Management International. Rossman stated that the agency continues to see increased demand for financial guidance among clients in their 20s as they manage these overlapping obligations.