Gen Z Says This Is Their Top Financial Concern Heading Into the Election
This election year, many Americans have multiple concerns on their minds as they prepare to fill out ballots, such as healthcare, national security and the environment. But economic concerns often top the list of the most important federal election issues, and this year is no different, as Gallup research shows.
Trending Now: 6 Reasons the Poor Stay Poor and Middle Class Doesn’t Become Wealthy
Check Out: 4 Genius Things All Wealthy People Do With Their Money
But economic issues aren’t limited to one area. When it comes to personal finance, several issues, like inflation and taxes, are prevalent, though the importance of these issues can vary among different generations.
For Gen Z, the top personal finance issue for 2024 is cost of living increases, as a new GOBankingRates survey found. Specifically, 30% of Americans ages 18-24 agree this is the top issue, as do 42% of those who are 25-34 — which includes some Gen Z but is mostly millennials.
Cost of Living
“The concern with the cost of living is very understandable. For Gen Z, no sooner had they reached adulthood than they got hit with unusually high inflation — in fact, the highest inflation rates in 40 years,” said Richard Barrington, financial analyst for Credit Sesame.
“While inflation has backed off from its peak, it’s not dead yet. Also, even once the inflation rate goes back to normal, you’re still stuck with the higher prices that inflation brought. Periods of deflation are quite rare, so you’re not likely to see prices go back to where they were previously,” he said.
That could explain why more respondents chose cost of living increases as their top concern, compared with inflation itself.
Find Out: How Far a $100,000 Salary Goes in America’s 50 Largest Cities
Overcoming the Rising Cost of Living
However, not all aspects of the economy are in bad shape, and it’s possible to overcome the rising cost of living.
“The one advantage people have in today’s environment is that the unemployment rate is very low. That means workers are in demand, so you should look for opportunities to optimize your income,” said Barrington.
“Even if you’re happy in your job, be alert to what other employers are paying so you can make sure you’re paid what you’re worth by your current employer. Don’t shy away from being assertive about asking for raises. This doesn’t have to be confrontational. It simply means making a case for the value you bring to the company,” he added.
And by raising your income now, you can set yourself up better for the future, regardless of what happens politically and on a macroeconomic basis.
“Your career can be like an investment, where earnings compound over time. Future raises build upon past ones, so each gain can be magnified if you invest the time and effort,” said Barrington. “After all, you can’t stop inflation, but earning more can make it easier to afford those rising prices.”
Housing Concerns
After cost of living increases, the top issue for 18-24-year-olds in the GOBankingRates survey is property taxes, with 20% citing this as the top concern — far more than any other age group.
“This may seem surprising, since young adults have much lower homeownership rates than other age groups. However, young adults have the fastest-rising homeownership rates. So, young adults are at the stage of life when many of them are trying to buy a home for the first time. Property taxes can be a barrier to that,” said Barrington.
Concerns over property taxes can also tie into cost of living increases, considering that housing has gotten more expensive in recent years. Five years ago, the median U.S. home sold for $284,418, and now the median is $420,321, according to Redfin.
“The average property tax rate in the U.S. is a little under 1%. That may not seem like much, but it can be the straw that breaks the camel’s back when you layer it on top of elevated home prices, a short supply of properties for sale and rising mortgage rates,” said Barrington.
Indeed, while only 8% of 18-24-year-olds cited mortgage rates as their top personal finance concern, that was the second highest rate among all age groups surveyed, only trailing 25-34-year-olds.
And while property taxes are a local rather than federal issue, this concern could indicate that Gen Z is focused on how taxes in general affect affordability — and a notable 16% listed income taxes as their top financial concern.
For those who want to take matters into their own hands instead of seeing if tax rates change, Gen Zers may be able to take advantage of their age to potentially move to more affordable areas with lower property tax rates and/or housing prices. Doing so before you start a family, for example, might be easier.
“Young adults face many financial barriers to buying a home. However, they should be aware that these barriers are much easier to overcome in some places than in others,” said Barrington.
“On the homeownership front, one advantage many in Gen Z have over prior generations is greater flexibility to work remotely. This can widen the choices of where to live and make it easier to choose a more affordable location,” he added.
Dealing With Debt
Mortgages aren’t the only type of debt that young people are focusing on.
“Student loan debt is obviously a hot-button issue, with many members of Gen Z grappling with payments for the first time after they resumed late last year,” said Barrington.
Credit card debt is also a big concern. “Already, many people in Gen Z have built up enough credit card debt that it’s holding them back from pursuing other financial goals,” said Barrington.
Overall, a Credit Sesame survey found that 80% of Gen Z individuals and millennials see debt as preventing them from buying a home, saving for retirement and having kids.
While debt can tie into politics, such as with the debate over forgiving some student loans, it’s also possible for young adults to improve their situations meanwhile.
“Working on your credit score literally pays off,” said Barrington. For example, “your credit score could make a difference of over 10% in what you pay” for credit cards.
These personal finance issues can also intersect. Lowering your interest rates can free up cash to help you afford cost of living increases, while finding ways to boost your income can help you pay off debt faster.
So while Gen Z does have serious financial issues to consider when heading to the ballot box this fall, there are ways to improve finances on your own.
Survey methodology: GOBankingRates surveyed 1,395 Americans aged 18 and older from across the country between Feb. 26 and Feb. 28, 2024, asking six different questions: (1) Which part of the U.S. would you prefer to live in when you retire?; (2) Which state in the South do you consider to be the best place to retire?; (3) Which state in the Midwest do you consider to be the best place to retire?; (4) Which state would you choose to move to if you had to relocate to the Midwest?; (5) Which state would you choose to move to if you had to relocate to the South?; and (6) Which of the following personal finance issues are most important to you in 2024?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Gen Z Says This Is Their Top Financial Concern Heading Into the Election
