Gen Z is racking up credit card debt faster than any other generation — use these 3 simple tips to get out of the hole and build a fat cushion
Hot inflation impacts just about everyone. But one generation is getting hit particularly hard: those born between 1997 and 2012 known as Gen Z.
They’re even borrowing money to keep up.
You could be the landlord of Walmart, Whole Foods and CVS (and collect fat grocery store-anchored income on a quarterly basis)
UBS says 61% of millionaire collectors allocate up to 30% of their overall portfolio to this exclusive asset class
Hold onto your money': Jeff Bezos issued a financial warning, says you might want to rethink buying a 'new automobile, refrigerator, or whatever' — here are 3 better recession-proof buys
According to a new report by personal finance company Credit Karma, Gen Z had an average credit card debt of $2,781 in Q4 of 2022, marking a 5.90% jump from the three months through May, the biggest increase compared to all other generations.
As the youngest generation in the workforce, Gen Z’s salaries may not have caught up with the rising costs of living. But other age groups are racking up debt too.
For instance, Gen X — generally defined as people born from 1965 to 1980 — had an average credit card debt of $8,266 in the final quarter of 2022, up 3.62% from March to May.
Even though the labor market has been strong with solid wage growth, it hasn’t been enough to combat surging price levels.
While the Fed has been raising interest rates to tame rampant inflation, you might want to take matters into your own hands. Here are three ways to improve your financial situation.
To avoid getting into debt, you can either increase your income or lower your expenses.
In this economic climate, it’s probably a good idea to hold off on purchasing big-ticket items that you don’t necessarily need. In fact, that’s exactly what Amazon founder and executive chairman Jeff Bezos recommends.
“If you're an individual considering purchasing a big-screen TV, you might want to wait, hold onto your money, and see what transpires,” Bezos tells CNN. “The same is true with a new automobile, refrigerator, or whatever else.”
There are also ways to lower expenses that you can’t avoid.
If you are paying too much for your car insurance policy, for example, you can compare car insurance and save up to $500 a year.
The same goes for home insurance.
While premiums are on the rise, comparing multiple home insurance companies is an easy way to find substantial savings.
Read more: Rich young Americans have lost confidence in the stock market — and are betting on these 3 assets instead. Get in now for strong long-term tailwinds
Getting a side hustle
Some people believe that switching jobs can lead to a better salary, but it can be daunting in this economic environment.
If you don’t want to switch jobs, consider getting a side hustle — something you get paid for doing in addition to your full-time job. It allows you to earn extra income — and could even be a way of testing the entrepreneurial waters.
In fact, side gigs have already become popular. Data from the Bureau of Labor Statistics revealed that as of December 2022, 4.59 million people were working a primary job full-time and a secondary job part-time. Moreover, 388,000 people were working two full-time jobs simultaneously.
There’s no need to start big.
A simple side gig like tutoring could be worth $75-$90 an hour, while dog walking could net you as much as $1,000 a month.
Putting spare change to work
When it comes to building a financial safety net, you don’t need large sums of money. In fact, you can start with some nickels and dimes.
A survey from MyBankTracker found that 55.5% of Americans don’t do anything with their spare change. They just let it sit. But those coins quickly add up and you can put them to work.
When you make a purchase on your credit or debit card, some apps automatically round up the price to the nearest dollar and place the excess — the coins that would wind up in your pocket if you were paying cash — into a smart investment portfolio.
Your spare change may not seem like much. But take a look at this math: $2.50 worth of daily round-ups add up to $900 per year — which can then earn more money in the market.
If you’re hesitant about jumping into the volatile stock market, using spare change could be a smart way to ease yourself in.
What to read next
Americans are paying nearly 40% more on home insurance compared to 12 years ago — here's how to spend less on peace of mind
Here's how much the average American 60-year-old holds in retirement savings — how does your nest egg compare?
Earn extra cash for your weekend with these quick money hacks
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.