“Unlocking the Purpose: Why Saving Money Matters”

Many in Generation Z are experiencing a sense of economic uncertainty.

According to a recent Credit Karma survey, nearly half (49%) of adults in this group — the oldest being in their late 20s — feel that planning for the future seems “pointless.”

Young adults have adopted a laid-back approach to summer spending, driven by feelings of financial “despair” and “hopelessness,” explains Courtney Alev, a consumer financial advocate at Credit Karma.

They often think, “What’s the point of saving for tomorrow?” Alev remarked.

This “YOLO mindset” among Generation Z—which includes those born from around 1997 to 2012—can be risky. If left unchecked, it could cause young adults to accumulate high-interest debt that they struggle to pay back, which might delay important life milestones such as moving out of their parents’ home or saving for retirement, Alev added.

However, these late teens and early 20s can be the ideal time for young individuals to cultivate positive financial habits. Experts suggest that even small investments made now can lead to significant returns over decades due to compounding interest.

“Failing to plan for their financial future can have long-lasting negative effects for these young people who are spending without caution,” Alev warned.

The disillusionment felt by many is understandable in the current climate, experts suggest.

The job market has been challenging for newcomers and those looking to change positions.

While the overall U.S. unemployment rate is relatively low at 4.2%, it stands much higher for those aged 22 to 27: 5.8% for recent college graduates and 6.9% for individuals without a bachelor’s degree, according to the Federal Reserve Bank of New York as of March 2025.

Debt is another significant concern for young adults, experts say.

“Many of them feel financially strained and also burdened by debt,” remarked Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California. “They are questioning if their degree will be valuable in a job market increasingly influenced by A.I. So, they wonder, is it all pointless?”

About half of those who graduated with a bachelor’s degree in the 2022-23 academic year carried student debt, with the average amount being $29,300, according to College Board.

The federal government resumed collections on defaulted student loans in May after a five-year hiatus.

Efforts by the Biden administration to forgive substantial amounts of student debt and ease monthly payments for borrowers struggling financially have been largely blocked by legal challenges.

“Many anticipated some level of debt forgiveness, which ultimately did not materialize,” commented Sun, a member of CNBC’s Financial Advisor Council.

Additionally, a report by the New York Fed in 2024 indicated that credit card delinquency rates for Gen Z are increasing at a faster pace than for older generations. Approximately 15% of Gen Z members have reached their credit limits, more than any other age group.

It has also “never been easier to purchase items” with the rise of buy now, pay later (BNPL) services, Alev noted.

A significant majority of Gen Z users — 77% — indicated that these services have encouraged them to spend beyond their means, according to the Credit Karma survey of 1,015 adults aged 18 and older, with 182 identifying as Gen Z.

These financial struggles are further exacerbated by a backdrop of political and economic uncertainty, marked by fluctuating tariff policies and their potential effects on inflation and the U.S. economy, experts explained.

“When you pile all these factors together, it can lead to a sense of pessimism among young people trying to begin their financial journeys,” Alev said.

Experts recommend that young adults work on reshaping their financial mindset.

“It’s crucial not to undermine your potential,” Sun emphasized.

“View it as a chance,” she added. “If expenses are manageable now, it’s the perfect time to invest as much as possible.”

Time is an ally, given the potential for compounded investment growth over many decades, noted Alev.

Though investing might seem daunting, even small contributions—such as $10 monthly into a tax-friendly retirement account like a Roth IRA or 401(k)—can make a difference.

The latter option is particularly appealing due to automatic payroll deductions and the chance to receive an employer “match,” which resembles free money for many.

“This is an exciting phase for investment, especially at a young age,” Sun said.

Adopting mindful spending practices, like instituting a 24-hour waiting period before purchasing non-essential items, can help curb unnecessary expenses, she suggested.

Sun also encourages paying off high-interest debt before investing, to avoid spiraling interest payments. Alternatively, they might focus on funding a 401(k) for the employer match while also addressing high-interest debts.

“Instead of wallowing in despair, channel that energy into action,” Sun encouraged. “Create a plan, take small steps, and be enthusiastic about the chance to invest.”