11 Sad Reasons Gen Z Thinks They're Broke When They're Actually Doing Pretty Well Financially
Vitaly Gariev | Pexels With Gen Zers becoming increasingly more concerned about the economy and their financial situation, it's normal for them to worry about simple things like groceries and rent. It seems like they suffer from money dysmorphia, which is the experience of believing you're better or worse off with money than you actually are.
Despite thinking they're broke, Gen Z is actually doing pretty well financially, considering the struggles they're dealing with. But the uncertainty they face on a daily basis, along with their constant comparison to others, there are sad reasons they tend to believe they're sinking financially.
Reasons Gen Z thinks they're broke despite doing well financially
1. They're anxious about the headlines
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Dealing with doom-and-gloom headlines about tariffs and a looming economic recession, many Gen Zers feel disillusioned by the news. The images of status they're seeing on social media aren't making things any easier for them.
They feel like they need to stay home so they don't need to spend money. But even if their bank accounts are telling them that they're okay, they feel a constant pressure to do something different. They want to spend on status trips or buy the newest designer bag.
With a healthy amount of worry about the future, it's no wonder Gen Z believes they're broke. But they're actually doing better than they think. They're aware of what's going on in the current economy, yet still have a hard time overcoming social pressure.
2. Long-term investments feel like a waste
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Along with the end times narratives many Gen Zers are privy to reading about online, the lack of long-term investments seem completely out of reach. It's hard right now to buy a home or even think about retirement, and because of that, they feel like investing money in these things won't do them any good.
They're less likely to save and budget because they don't have any long-term financial goals. If they're not already living paycheck-to-paycheck, they're spending money on the present moment, like going out with friends or making their living space more cozy.
Part of this is also fueled by Gen Z caring less about the traditional financial goals like homeownership that older generations appreciated. Instead, they're focused more on living for today and making memories.
3. They spend on little luxuries
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According to a study from the Journal of Behavioral and Experimental Economics, many young people are spending on small things like makeup or skincare items to cope with uncertainty about the world and their financial state.
They feel as though they don't have anything larger to save for, so they're spending on small luxuries and status symbols as a way to deal with their anxieties. They've been largely fed a narrative about their economic status and the inaccessibility of investments, so they feel more pressured to spend their money now, rather than save.
4. They have unrealistic expectations
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Gen Z has more accessibility to unrealistic societal standards and expectations around money on social media compared to older generations at the same age. Many believe they're broke despite doing well for themselves, but it's because they're comparing themselves constantly to influencers.
They don't seem to realize that these influencers are quietly taking on debt to fund their Instagram vacations. Gen Z also has the lowest rates of financial literacy than their older counterparts, meaning they struggle to explain their spending habits, even outside of the pressure from online.
5. They downplay their small achievements
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Dealing with unrealistic standards around money, many Gen Zers find it difficult to celebrate their small financial wins. When they pay off a credit card or are able to afford an apartment of their own, that's a big deal.
But they don't see it that way. They're so focused on the large-scale narrative that society pushes, despite being nearly impossible for Gen Z to currently achieve. Even when they do achieve a goal, they downplay and dismiss it. They're fixated on the big milestones instead.
6. Their credit score gives them anxiety
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Credit scores are largely impacted by the state of the economy or unemployment, rather than individual choices and freedoms. Yet, many Gen Zers constantly worry about their credit scores. They fear they may not be able to get a loan or get approved for a living space in the future.
While they're surely important in some contexts, credit scores aren't the only measure of financial success and stability. Gen Z is doing better than they think, and should avoid falling into the trap of focusing so much on credit score that it lands them in debt.
7. They view frugality as failure
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Making frugal choices feels like failure for many Gen Zers, especially when coupled with unrealistic financial expectations from social media. Shame or embarrassment around healthy financial habits make it hard for them to prioritize their financial well-being, and when they're forced to watch their friends and idols spend without reservation online, it makes things worse.
They're disillusioned. The people they watch spend without a second thought aren't actually as financially free as they claim to be. Their vacations are going on a credit card and they're taking loans out for music festivals. They're even being gifted the items they're flaunting on social media.
8. They feel guilty for spending money
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It's not entirely uncommon for Gen Z to harbor constant regret and guilt over their spending habits. From basic necessities to larger extravagant purchases, the act of spending money is rooted in shame for them. They feel more behind and uncertain than they believe they should be at their age.
Stuck in a cycle of instant gratification and guilt, these young people often fall into unhealthy spending habits from a young age. As a result, they're unsure of how to break the cycle and adopt better habits.
9. They take on all the blame for financial struggles
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Many Gen Zers who think they're broke are stuck in a misguided mentality about their financial status. They don't fully acknowledge or give grace to the institutional failings contributing to their struggles. Nothing is as easy as it was for their parents or grandparents, and they deserve the grace they're not awarding themselves.
Faced with generational tension and pressure from their parents and family members to be more financially secure, it's easy for Gen Zers to struggle with money dysmorphia. After being told hundreds of times that it's their fault they didn't work hard enough, it can be difficult to look at the bigger picture and acknowledge institutional shifts and failings.
10. They feel pressured to punish themselves for spending
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Budgeting and other financial habits feel like a punishment for many Gen Zers. They not only resort to unhealthy money mindsets that revolve around sacrifice, but they pressure themselves into restrictive spending habits when they feel insecure or uncertain.
Around 77% of Gen Zers actually admitted they feel guilty for spending money on things that bring them joy. Rather than maybe trying to save a little money here or there so they can put funds towards things they enjoy, they end up believing they're a lot worse off than they really are.
11. They have a hard time making future plans
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While Gen Zers are perfectly happy living the present moment and enjoying experiences now, they have a lack of future goals. They're less inclined to put money away in savings accounts and struggle to set financial goals for their future selves.
Their financial futures are constantly evolving in front of their eyes, with Gen Zers spending nearly twice of their savings trying to keep up with rising costs and inflation. It's much harder for them to envision a future of financial stability when they're stuck in a state of constant financial stress.
For some, this worry and anxiety is well-founded. But for others, they believe it's their fault they're falling behind financially despite society failing them.
Zayda Slabbekoorn is a senior editorial strategist with a bachelor’s degree in social relations & policy and gender studies who focuses on psychology, relationships, self-help, and human interest stories.
