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A recent study conducted by Point revealed that 64% of Gen Z reported personal finance as the biggest stressor on their mental well-being. This percentage surpassed the concerns expressed by other generations, including baby boomers, Gen X, and millennials. Gen Z encompasses individuals born after 1996, according to the Pew Research Center.

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Financial Stress and Gen Z
Despite Generation Z’s reputation for social activism and concern for societal issues impacting mental health, personal finance emerged as the biggest source of stress for this generation.

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Factors Contributing to their Stress
Saving for retirement and the challenges of homeownership are additional factors contributing to the financial stress experienced by Gen Z. While all generations expressed worries about debt, baby boomers and Gen X exhibited greater concerns about credit card debt specifically.

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Debt Burden
According to a recent report by Credit Karma, Gen Z witnessed a substantial increase in average debt, which reached $16,283 in the final quarter of last year—a 3.1% rise compared to the preceding three months. This increase outpaced other generations.
High inflation rates, surpassing wage growth in many parts of the U.S., have compelled consumers to increasingly rely on credit cards to bridge the gap. However, Gen Z workers, often earning entry-level salaries, face greater difficulties in keeping up with soaring living costs. Their debt growth rate is the highest at 5.9%. They also experienced the largest increase in auto loan debts at 2.3%.

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Implications for Credit Scores and Financial Future
This group not only accumulates debt at a faster pace than older generations but also struggles to make timely payments. This generation was the only one to observe an increase in past-due accounts, including credit cards, mortgages, student loans, medical loans, auto leases, or auto loans overdue by more than 30 days. Gen Z consumers possess the lowest average credit score of 653.
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