Millennials and Gen-Z adults are finding it increasingly difficult to achieve financial independence, according to a recent study conducted by credit agency Experian.
The study found that a mere 28% of participants claimed to be entirely self-sufficient and not reliant on their parents for financial support
More than half of the respondents acknowledged that they were self-sufficient and at least somewhat financially dependent on their families, with a staggering 70% expressing feelings of shame when having to ask their parents for financial assistance.
These statistics shed light on a more profound concern about the current unstable economy and the job market. Factors such as rising inflation, a higher cost of living, and mounting student loan debt have rendered the idea of living independently unattainable for many individuals. While there has been some relief with a temporary pause on student loan debt repayment and a decrease in inflation, the circumstances faced by adults aged 18 to 42 make achieving financial independence and wealth accumulation virtually impossible.
One significant contributing factor is the modern spending habits of these younger generations. Nearly 60% of the survey participants admitted to struggling with self-sufficiency. The perception of saving for major milestones such as homeownership and retirement has diminished in comparison to previous generations, with two-thirds of millennials and Gen-Z adults prioritizing life experiences and self-sufficiency over long-term financial planning.
Another potential cause is the lack of financial knowledge passed down by their families
Some young adults either avoid financial planning altogether or simply follow the financial decisions established during their upbringing. While some individuals believe their parents’ financial aptitude is subpar and thus take it upon themselves to strategize independently, others have never been taught about finances, leaving them in the dark to be self-sufficient. Although the latter is less common, approximately one-third of the survey respondents claimed that their parents never provided any financial education. On the other hand, nearly half of the participants had to rely solely on their own financial knowledge due to their parents’ lack thereof.
This study underscores the challenges of wealth-building in today’s society, particularly within Black communities. While the study did not explicitly disclose racial data, it indirectly suggests the need for Black families to prioritize financial literacy and openness, ensuring that younger generations are adequately prepared for their financial futures.