Young Adults Carry 12% More Debt Than A Year Ago

Ted Rossman reports that young adults are carrying more financial weight than previous generations. His organization, Money Management International, cites TransUnion data showing Gen Z holds higher debt levels than Millennials did at the same age. This difference remains even after adjusting for inflation.

The pressure on Gen Z budgets has accelerated recently. Rossman said the nonprofit agency saw a 35% increase in client demand from this generation over the past year. The average debt load for these clients rose by 12% during that same period.

High rents and student loans are the primary drivers of this trend. Many young adults also rely on buy now, pay later services. Rossman noted that these costs leave many workers living paycheck to paycheck with little room for savings. He described these early career years as particularly expensive for household formation.

Rossman advised clients to track their basic budgets and monitor short-term credit spending. He warned that buy now, pay later plans are popular among people in their 20s but function as debt. "It’s not a free lunch," he said. Even if a plan offers six weeks of interest-free payments, users must still make multiple installments and risk overspending.

Credit card interest rates often reach the 20% range. Rossman said people who feel overwhelmed by these costs can seek help from credit counseling agencies to manage their obligations.