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Half of Millennials and Gen Zers Are Living Paycheck to Paycheck, Survey Shows

Two people looking over their bills while sitting on their living room couch.

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It’s no secret that many young adults are struggling to make ends meet, and that trend has continued to get worse. According to a survey by Deloitte, half of millennials and Generation Z are living paycheck to paycheck. With economic conditions uncertain, it’s no wonder that financial concerns are a top priority. But there is hope. Here are some strategies that can help these generations break the paycheck-to-paycheck cycle, build savings, and plan for a better financial future.

Second side jobs on the rise

As a new generation enters the workforce, there is a sense of optimism when it comes to personal finances. Gen Zers are leading the charge, with 44% believing that their finances will improve in the next year.

However, reality paints a different picture. As of 2023, over half of both Gen Zers and millennials reveal that they live paycheck to paycheck, indicating that immediate financial needs are taking priority over long-term goals.

Millennials 2022 Millennials 2023 Gen Z 2022 Gen Z 2023
Top concern is cost of living 36% 42% 29% 35%
Living paycheck to paycheck 47% 52% 46% 51%
Has taken on a side paying job 33% 37% 43% 46%
Data source: Deloitte survey data.

For those who have been in their jobs for less than two years, living paycheck to paycheck may be a common reality. According to recent studies, individuals in this category are about 10% more likely to be in this situation compared to those who have been with their employer for more than five years.

This financial strain is causing them to take on extra work and worry about their ability to plan for the future. To help supplement their income, almost half of Gen Zers and over a third of millennials are taking on side jobs. Top side jobs include selling products or services online, gig work such as food delivery or ridesharing, pursuing artistic ambitions, and even social media influencing.

Achieving financial stability

With some practical guidance, young adults can break the paycheck-to-paycheck cycle and achieve financial stability.

Start by tracking your spending

Knowing where your money is going is the first step in taking control of your finances. Create a budget and track your expenses for a month or two.

Look for areas where you can cut back, such as eating out or subscription services you’re not using. Redirect that money toward savings or paying off debt.

Speaking of debt, tackle it head-on

High-interest credit card debt and other personal loans can be a huge drain on your finances. Make a plan to pay off your debt as soon as possible.

Focus on the highest interest rate debts first. Consider consolidating loans or refinancing to lower interest rates and monthly payments.

Consider a side hustle

If you’re struggling to make ends meet with your current income, it might be time to look for a second job. But don’t just settle for any job. Think about your skills and interests and find a side gig that aligns with them.

Freelance work, pet-sitting, and tutoring are all great options. And thanks to technology, there are more work-from-home opportunities than ever before.

Build an emergency fund

Unexpected expenses can derail even the best financial plans. Aim to save at least three to six months’ worth of living expenses in an emergency fund. Set up automatic transfers to a savings account so you don’t forget to save.

Invest in your future

It’s easy to focus solely on paying bills and making it to the next paycheck. But it’s important to plan for the future, too. Start by contributing to your employer’s retirement plan, such as a 401(k) or IRA.

If you don’t have access to a retirement plan at work, look into setting up a Roth IRA. These types of accounts offer tax-free growth and withdrawals in retirement.

Living paycheck to paycheck can be stressful and overwhelming, but it’s not a permanent situation. By creating a budget, paying off debt, earning extra income, saving for emergencies, and investing in your future, you can break the cycle and achieve financial stability. It takes time and effort, but the peace of mind and financial freedom that come with it are well worth it.

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