Why Money Anxiety is Real for Gen Z

It seems like each new generation is more anxious than the last—and from a financial perspective, they have an increasing number of reasons to feel that way.

A 2018 survey from the American Psychological Association found that 81% of Gen Z said money was a major stressor for them, compared to 64% of all adults. About 33% said personal debt was a source of anxiety. In terms of general anxiety, less than half of Gen Z said their mental health was “excellent” or “very good”, falling behind all other generations.

So what factors are influencing this troubling trend, and more importantly, what can members of Gen Z do to avoid becoming a statistic?

What Gen Z is Anxious About

My husband’s cousin, Rachel, is 23. We recently talked about how financial anxiety plays a big role in the lives of her and her friends. Their biggest concerns are rent, student loan payments and the scarcity of available financial opportunities.

This fits with the rest of Gen Z. The APA survey said that personal debt, including student loans and credit cards, and housing instability were “a significant source of stress” for more than 30% of the cohort.

“I think the opportunities can be limited,” she said. “Sometimes internships are not an option for people because they don’t have enough money to live off the little to no pay interns receive.”

Rachel and her friends don’t think about saving for retirement, buying a house or how they’ll pay for health insurance. They assume that money for those things will come in the future, when their incomes hopefully increase.

When it comes to financial anxiety, social media makes matters worse. Rachel said seeing status updates and photos on Instagram only fuels the desire to keep up appearances.

“Whether it’s a trip, activity or a cute outfit, the perception that other people are living their lives ‘perfectly’ makes me want to as well,” she said.

How Gen Z Can Get Past Their Money Anxiety

Since social media can affect how Gen Z spends money, limiting exposure to it can reduce anxiety and depression. A 2018 study published in Preventive Medicine Reports on the association between screen time and psychological well-being reported that 45% of teens said social media made them feel judged and 38% of them said it affected their self-esteem.

Limiting social media use or being more selective of who to follow could also reduce this figure. A 2018 study from the University of Pennsylvania found that adults between 18 and 22—squarely in the Gen Z age range—who limited social media use to 30 minutes a day reported decreased depression and loneliness.

Financial therapist Amanda Clayman said news coverage about millennials and student loans also affects Gen Z, especially those deciding where to attend college. The student loan debt crisis makes them more aware of their financial future – not necessarily a bad thing—but according to Clayman, even productive money conversations can be anxiety-producing.

Clayman said anxiety of any kind can serve as a wake-up call. If you’re feeling anxious about your student loans or get nervous logging onto your bank account, see if there’s something you can do about it.

Make a list of questions, like if you qualify for student loan refinancing or how to sign up for your company’s 401(k) plan. Taking just a small step towards addressing your financial concerns is often enough to positively impact your outlook, and those benefits will only increase as you gain momentum.

Learn to differentiate

If you can’t change your financial circumstances, try to identify your specific anxieties and how they manifest. Writing down your concerns in a journal and working with a licensed therapist can also help.

Clayman said that while anxiety can be a sign to do something, it can also just be noise. The key is learning to differentiate what your anxiety means, and knowing when—and how—to let those worries go.

The worst thing Gen Z can do is reinforce anxious habits, like checking a bank account several times a day. It may feel like an itch that needs to be scratched, but this type of behavior only strengthens the neural pathways to anxiety.

“We don’t want to feed that tiger,” Clayman said.

Clayman suggests a more productive approach: set aside a certain time every week to tackle your financial chores, like checking your budget and tracking your expenses. You should also attach something pleasant to the task, like doing it at your favorite coffee shop or having a friend with you.

Consider counseling

If possible, find a counselor or therapist to work with. You can find discount therapy services through a university’s psychology program, where you’ll meet with a student under professional supervision. Apps like Moodnotes and Talkspace are also more affordable solutions. Look through your insurance plan and see if there are any low-cost medical clinics in your network. Some of these have therapists on staff.

A therapist can help you accurately identify your mental health issues and give you a more specific framework to deal with them.

Talk to your friends

Money anxiety isn’t a problem that can go away just with some professional help. It’s a holistic issue that requires a multi-pronged approach. Learn how to negotiate your salary, track your expenses, face your financial concerns and above all, talk to your friends. Even if they can’t fix your problems, sharing your concerns will make you feel less alone and more supported.