The traditional American Dream of Baby Boomers is dramatically different from the experiences of Gen-Z-ers. When it comes to jobs, careers, and lifestyles, the much younger cohort prioritizes purpose and social causes over climbing the ladder to the C-suite. They’d prefer to work remotely and with companies that are aligned with their values. They’re thrifty yet selective. While they’ll save money, this group will splurge on experiences in the moment.
The break from tradition is due, in part, to the new harsh realities that Gen-Zs need to cope with. The Boomers’ American Dream of working hard will provide for a nice house with a white picket fence, new cars, a family, financial security, and pensions.
So far, by comparison, this hasn’t worked out too well for Gen-Zs. This cohort faces very different economic equations. They need to carry the burden of college student debt. Housing costs are out of reach. Inflation and high costs are hurting this generation financially.
About Gen-Zs
Gen Z, born between 1997 and 2012, face an economic landscape far more daunting than that of previous generations. This entails skyrocketing housing costs, cumbersome student debt, a tough time finding and keeping a job, relegated to gig type jobs. These travails contribute to derailing them from the traditional American Dream path.
In the current economy, it’s harder for them to secure safe jobs. Many have lost faith in America’s institutions, and feel somewhat cheated, compared to the older generations who seemed to have had it much easier.
They witnessed their parents getting laid off in the financial crisis of 2008, with some losing their homes. The Gen-Zs came of age during the COVID crisis. Many young adults had to leave college and move back home for health safety reasons. These and other factors led to the Gen-Zs feeling that their lives will be much different than their parents. This may be the first generation in recent history that may not do better than their parents.
Psychologically, they’re wired differently too. Growing up with smartphones and social media, they are constantly seeing the struggles of peers. They’re not necessarily rejecting the American Dream out of laziness. They just can’t catch a break.
Living At Home With Little Savings
According to the National Association of Realtors, the median sale price for an existing home in the U.S. hit a record-high of $426,900 in June 2024. The median income for full-time Gen Z workers aged 18-27 hovers around $47,000, making homeownership a distant dream for many. According to a Clever Real Estate survey, 60% of Gen Z adults worry they might never own a home.
Financial stress is pervasive, with 46% feeling anxious about money most of the time and only 37% feeling secure. As of 2024, the average federal student loan debt was $38,375 per borrower.
The quality of jobs remains a concern. AI, automation, offshoring, and layoffs makes it tough to find a new job. As companies institute cost cutting measures, it’s also hard to hold onto a job too. The gig economy’s growth and wage stagnation have made upward mobility scarce, leaving many Gen Zers reliant on precarious part-time work.
Housing affordability remains a significant challenge. Rents consume 30-40% of their income. In 2023, 31.8% of young adults aged 18-34 lived with their parents at the national level. Traditional milestones like marriage and children are also being deferred. Nearly half (49.7%) of renter households in the U.S. were cost-burdened in 2023, meaning they spent more than 30% of their income on housing costs. Additionally, 42.5% of renters paid gross rent exceeding 35% of their income.
Spending And Investing
Gen Z’s are prioritizing experiences like travel or concerts over saving for big goals, not out of recklessness but as a pragmatic trade-off for mental health amid a grind that feels endless. An $50,000 plus down payment seems insurmountable when basic costs dominate their budgets. Yet their approach isn’t purely fatalistic. Many are redefining success through side hustles , digital nomadism, and delayed milestones.
Financially, they’re experimenting by buying and trading stocks and crypto currencies. This reflects a generation adapting to constraints by seeking YOLO trades to get that one big boost to get things going.
They are not giving up. While their preference for experiences over savings might seem shortsighted, it’s a calculated response to an economic reality where long-term goals feel unattainable. Still, they try to improve their prospects by prioritizing long-term financial planning. They do this via maximizing IRA contributions for compound growth or diversifying investments into low-cost ETFs like those tracking the S&P 500 like Vanguard’s VOO fund to balance immediate needs with future stability.
Their adaptability offers hope. Culturally, they’re poised to redefine the American Dream, focusing less on their parents’ benchmarks and more on sustainable, flexible paths that fit their realities. This generation could turn their skepticism into a new vision of success—one built on their terms rather than inherited expectations.