Skip to content

Every generation will face certain financial challenges, but are Generation Z Aussies doing it tougher? Numerous studies indicate they are. Gen Z are facing unique financial challenges compared to older generations, primarily driven by economic shifts, rising costs of living, and changes in the job market.

Research released late last year by ASIC’s Moneysmart program indicated that for 68% of Gen Z finances are a major cause of concern, more than any other age group (57% of non-Gen Zs). Studies also showed that Gen Zs have higher levels of personal debt and greater reliance on credit products than other generations.

Financial Challenges for Gen Z

Studies of the most expensive countries to live in the world usually list Australia in the top 10. This is not surprising, especially when you take into account the rising cost of living released by the ABS.

Rising cost of living

  • Over the twelve months to the March 2024 quarter, the CPI rose 3.6%
  • Housing prices in major cities like Sydney and Melbourne have skyrocketed, making it difficult for young people to afford homes. Rent prices are also high, adding to the financial burden.
  • Higher education costs have increased, with many students accruing significant debt before entering the workforce.

    Job Market Volatility

    • Gen Z workers are often in precarious employment situations without the benefits and job security older generations had.
    • Advancements in technology threaten traditional job roles, necessitating continuous skill development and adaptability.

    Overcoming financial hurdles

    Many Gen Z are understandably relying on the bank of mum and dad to help them over significant financial hurdles however there are steps that individuals can take to improve their financial outlook.

    1. Improve financial literacy
      • Budgeting, saving, and investing can help Gen Z manage their finances better. Tools like budgeting apps and online courses can be very beneficial.
      • Understanding how to manage debt, interest rates, and the long-term impacts of loans is crucial.
      • Start investing early, even with small amounts, to take advantage of compound interest. Platforms like micro-investing apps make it easier for beginners.
    2. Career planning and development
      • Develop skills with continuous learning and skill acquisition to stay relevant in a changing job market. Online courses and certifications can provide flexible learning options.
      • Be proactive with pursuing career opportunities and don’t settle for less.

    While Gen Z in Australia faces significant financial challenges, strategic efforts in education, career development and personal finance management can help mitigate these issues.