Navigating Gen Z Financial Challenges like a Baby Boomer

Between housing prices and cost-of-living pressures, is it any wonder that Generation Z (those aged between 15-30 depending on your classification) is feeling the financial pressure?

ASIC's MoneySmart found that 82% of Generation Z feel financially stressed and are more likely to view their finances as a major cause of concern compared to other generations.

They also typically hold higher personal debt, with Canstar’s 2024 Consumer Pulse Report noting that 45% admitted to personal debts of $23,888 (the average is 35% of Australians holding around $15,179 in personal debt).

If you consider that people aged in this bracket are typically at the earlier parts of their careers (or still finishing school) and therefore earning less, this might make intuitive sense.

However, you also need to factor the bigger picture in to appreciate the full pressures surrounding this generation.

Home values gained 12.4% in 2025 alone, and have gained 46.8% over the past five years based on Cotality’s data. The same data showed that rents rose 5.2% - which was down from double-digit growth in 2021, 2022 and 2023.

The cost of living pressure doesn’t stop there. The jump in inflation over the past five years is hitting grocery bills and the petrol pump, while wages growth varies – the private sector has seen a decline while the public sector seen an improvement.

For many in this generation, it may feel harder and harder to get ahead, or even to simply have an emergency buffer. To that point, ING Bank’s research found that only 19% of Gen Z have a three-month emergency fund, with higher numbers in older cohorts.

While there’s been plenty of debate over which generation has had it easier, with Baby Boomers receiving a frequent beating, there’s something to be said for the strategies that they and their parents, the Silent Generation, used for their finances.

So it’s worth asking the question: Could a Baby Boomer approach to finances help with some of the financial challenges of Gen Z?

I spoke to Jackson Raddysh, Financial Adviser with PrimeAdvisory for his thoughts on this. As a side note, Jackson specialises in FIRE – that’s Financial Independence, Retire Early. His approach to FIRE is less lifestyle sacrifice, more living on your own terms but the point is, he still believes that dream is possible for Gen Z.

Challenge 1: Managing personal debt

As Raddysh points out, there’s “good debt” and “bad debt” and your approach to these makes a difference. You don’t have to avoid all debt, but it’s worth being very measured about what, how and why when it comes to debt.

Debt that is an investment into your future, be it education, a mortgage or assets like shares, are typically considered “good debt”, while your typical credit card debts, travel debt, gambling and other items in this category are “bad debts” – they don’t benefit you in the future.

What’s the boomer approach here? Avoid bad debts where you can.

“Where possible, don’t accrue debt on things like Afterpay. They often have high interest rates, will hurt your credit rating and are easy to forget about, leaving you in more debt,” says Raddysh.

“Upgrading phones every one to two years, fast fashion indulgences every month and other similar practices, cost serious money. That’s money people could put to better use on goals that matter more to them, like setting themselves up financially.”

As mentioned earlier, Gen Z have the highest personal debt on average – this isn’t even factoring in HECS-HELP debts for university, which has gone up around 2.5x in under 20 years (standing at $31,500 now).

When it comes to HECS, repayments are managed on your part by being taken from your salary at a certain level so it’s more the other debts you have to plan how to manage.

If you’ve already accrued debt, the boomer (and financial adviser approach) is to plan through how you can repay it as quickly as possible (to avoid build up of interest on that debt) and avoid accruing further debt.

“It comes back to your income. What amount can you dedicate to repayments while still maintaining payments on other essentials like rent, food or transport? If your lifestyle costs more than your income, it might be time for a rethink,” Raddysh says.

For some, it can be worth seeking out help and there are free government services to help you plan and manage your debts. Moneysmart.gov.au can be a helpful starting point for support. It offers a range of calculators and tools. You can also use the free National Debt Helpline on 1800 007 007.

If your debts are related to mental health challenges or addictions, take the time to seek support from free services related to these alongside financial help – it’s about support for the deeper challenges which will mean you are less likely to fall back into debt and other problems down the track.

Challenge 2: Savings, savings, savings

While Gen Z typically are less likely to have savings, it doesn’t mean this isn’t important to them. Gen Z still hold dreams for property, travel, investments or even hopes of early retirement (the FIRE movement). The challenge is saving enough, although it can feel out of reach in an expensive world.

Raddysh believes the key here is Intentional Spending – and this, too, is something that Baby Boomers and the Silent Generation often followed.

What does this mean? You buy with care and with meaning based on your needs and values.

Raddysh explains it is about understanding your values and what is most important to you, what is essential to living and the costs around these to help you manage your spending. If you have at heart your values when you spend, it’s easier to spend with intent.

For example, if you look at Baby Boomers, this might be the habit of buying high quality items that you reuse, repair and refurbish over time. The added bonus is that this is a more environmentally sound practise.

While the concept of being frugal might be associated with this, that’s not necessarily the point.

“I prefer not to use a traditional budget for this as it is associated with a scarcity mindset that can be harder to stick to. I prefer a ‘reverse budget’ where you look back 2-6 months to see where your cash is going. Does it exceed your income? What do you want to spend more on? What do you want to spend the same on? What do you want to spend less on? Focus less on the negatives and more on adjusting your habits in line with your values,” Raddysh says.

When it comes to the FIRE movement, Raddysh notes there tends to be a little bit more sacrifice involved – but this too relates to a value for flexibility. It might mean smaller homes, or less travel with the hope of greater flexibility for living over working down the track.

“Live intentionally and focus on your key values for your own happiness and your financial independence,” Raddysh says.

Taking a specific leaf from Baby Boomers when it comes to buying a home, consider what deposit you can build with the options available to you – savings, investments and government initiatives like the first home buyers super scheme or the transfer duty exemption in NSW– then determine what is most important to you in a property.

Some of those dreams you may need to compromise on. That might mean the worst house in a good area that you slowly repair, one in an up-and-coming area, or it might mean a property that you rent out in a different place entirely just to get on the ladder. Perhaps your timeframe for buying will need to adjust.

Some Gen Z investors also partner with family or close friends to get on the ladder. If you do go for this approach, make sure to get legal agreements in place.

Challenge 3: Enjoying life while staying on track

It’s generally said these days that your 20s are about trying new things, having fun, building your career, travel. After all, life is for living too – but you still need to manage your finances and avoid debt, while saving money.

This is not a unique challenge to Gen Z.

“All investors face challenges of managing competing priorities, while making sure that they have access to accurate and relevant information for them. With older clients, the priorities just shift,” Raddysh says, pointing to funding retirement in old age, or repaying mortgages in your 40s and 50s as challenges too.

For Raddysh, managing this comes down to a similar approach to challenge 2 – intentional spending and understanding what is truly important to you.

If travel is most important to you and you want to spend more on this, where might you adjust your other spending to allow for this?

It might also mean taking a different slant on how to live out your values.

For example, that same dream of travel might not have to mean luxury.

Could you visit the same destinations in different ways? Are there different, more affordable destinations that might offer a similar experience?

Or enjoying time with friends or family could mean more varied activities that cost less – many Gen Z are already known for taking more creative approaches, like meeting friends for walks instead of expensive dining.

This, too, is a similar approach to Baby Boomers who were known for their potlucks and picnics. After all, dining out was just expensive for them in their youth as it is today.

The biggest key to managing Gen Z challenges like a Baby Boomer

While it’s easy to dive into the battle of the generations, each generation can always learn from the others.

One of the great lessons to take on from Baby Boomers and generations before them is the power of Intentional Spending.

Think about your values and adjust your spending for this. When you do spend money, make sure it meets with your values – and where possible, aim for quality in your purchases that you reuse, repair and refurbish to get true longevity out of.

Think about the future too – a little bit put aside in an investment account today on a consistent basis could mean financial freedom down the track.

Disclaimer: This article is prepared by Sara Allen. It is for educational purposes only. While all reasonable care has been taken by the author in the preparation of this information, the author and InvestmentMarkets (Aust) Pty. Ltd. as publisher take no responsibility for any actions taken based on information contained herein or for any errors or omissions within it. Interested parties should seek independent professional advice prior to acting on any information presented. Please note past performance is not a reliable indicator of future performance.