Report: Gen Z, millennials have positive financial outlook
Despite increased consumer debt and lingering inflation, Americans, especially younger ones, have a positive outlook on the future.
That’s according to a new report from tax preparation company H&R Block, titled the “2024 Outlook on American Life Report.” The survey found that Americans, regardless of income, feel optimistic about their income growth, being able to retire and maintaining financial stability despite rising costs and debt. Two-in-three Americans, on average, expect to have greater economic opportunities than their parents had, with 70% of Gen Z strongly or somewhat agreeing and 65% of millennials strongly or somewhat agreeing.
In H&R Block’s survey, younger earners saw the largest increases in earnings in 2023 compared to 2022. Gen Z saw a 30% increase, while millennials had their earnings increase 11%. Gen X earnings increased 5%, rising slightly above inflation (3.4%), while boomers only experienced a 2% increase from 2022 to 2023.
Six-in-10 (60%) Gen Z respondents and more than half (53%) of millennials agree that next year, their financial situation will look better than this year, and income is the most likely reason why. The confidence remained across generations, with 39% of Gen Xers saying so, along with 28% of boomers.
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Despite financial confidence, debt is still a burden for many Americans. One-in-six Americans hold student debt, and two-in-five of those with student debt say they have more than they can manage.
Nearly half of Americans hold credit card debt, with Gen X being the most likely to be indebted at 55%, compared to 39% of Gen Z, 49% of millennials and 47% of boomers. Of those holding credit card debt, as many as two-in-three say their level of credit card debt is “unmanageable,” with Gen Z leading the way at 76%. H&R Block says that consumer loans are at an all-time high of more than $1 trillion, while consumer credit card debt is now $881 billion, down slightly from a 2023 record high of $912 billion.
Nearly six-in-10 (59%) Gen Z respondents said they would prefer to be salaried employees, while 29% aspire to work for themselves. To find new ways to earn, H&R Block’s survey says that Gen Z is dabbling in a variety of side-hustles. These include:
- 24% work for an app-based employer, such as a food or grocery delivery service.
- 51% plan to monetize a hobby in the next year.
- 55% plan to learn a new skill or trade in the next year.
- 41% invest in employer-sponsored plans, such as a 401k.
- 22% invest in cryptocurrencies.
- 15% invest in gold and silver.
H&R Block’s audience samples were weighted to be representative of the U.S. population on gender, age, ethnicity/race, education and region. The report features financial data from the 2023 calendar year.
