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  • Fred Feiner

The Kids Are Alright, But Their Stress Levels Are Rising


Like any parent or guardian, most of us are concerned about the future our children face. Today’s kids are confronted with alarming environmental changes, the ravages of global pandemics and, in many cases, the challenges of monumental debt, just to name a few. We are particularly concerned about debt because that may be one area where parents should have more control over how our children start their adult lives.


The crushing cost of college is unavoidable for most families and there is only so much we can do to control the burden. As it turns out, the parents of Generation Z, those children born roughly between 1997 and 2012, may actually be able to breathe a bit easier. The kids have actually been listening to the financial lessons we repeatedly shared over the years. As the father of two Gen Zers, this comes as news to me.


Trying to Avoid Debt

Generation Z has learned from Millennials the consequences of mind-numbing debt. The teens and young adults of this generation know they may not be able to escape the rising costs of life, including education, housing and personal expenses, but appear to be better prepared for the consequences of their choices.


Gen Z is on target to be the best educated generation yet, but the rising popularity of public colleges and universities with merit-based scholarships indicates they are trying to balance wants and needs with future debt in mind, possibly with a little parental prodding. The 13th Annual National Society of High School Scholars (NSHSS) survey observed that 90 percent of Gen Zers planned to pursue grants and scholarships for college, 65 percent planned to have a job while in college and 48 percent planned to finish college with at least $10,000 in debt.


Digital Natives, Savvy Shoppers

Generation Z is the first age group that has never known life without the internet and 95 percent of those between the ages of 13 and 17 have access to a smartphone, according to one survey. They are digital natives who spend 74 percent of their free time online, nearly three hours every day, and they use that smartphone to shop multiple channels for what they want. Most Gen Zers still prefer buying in brick-and-mortar stores, but they overwhelmingly expect significant savings through discounts and rewards programs.


They use that smartphone for much more than shopping though. Many Gen Z kids express greater comfort being online than being out at parties with their friends and they are divided about how much social media contributes to their stress levels, but those stress levels are growing, particularly among Gen Z adults. In past years, the annual national stress survey of the American Psychological Association (APA) has listed the stress levels of Generation Z as second only to Millennials, but that changed in the 2020 edition released in October. The COVID-19 pandemic has created a “national mental health crisis that could yield serious health and social consequences for years to come,” according to the APA report. Researchers asked participants to gauge how much stress they felt on a scale of 1 to 10 where 1 means little to no stress and 10 means a great deal of stress.


The Rising Stress Level of Gen Z

“Gen Z adults (ages 18–23) are at a pivotal moment in their lives, experiencing adulthood at a time when the future looks uncertain,” the report observed. “This may be driving key differences in reported stress as Gen Z adults report the highest stress level during the prior month, on average, at 6.1 out of 10. This is significantly higher than all other generations: 5.6 for Millennials (ages 24–41), 5.2 for Gen X (ages 42–55), 4.0 for Boomers (ages 56–74) and 3.3 for older adults (75+). For comparison, the reported stress level, on average, across all adults is 5.0; this is on par with the level reported in 2019 (4.9) and 2018 (4.9). Despite this consistency, reported stress levels among Gen Z adults have been increasing slightly over the past two years, from 5.6 in 2018 and 5.8 in 2019 to the high of 6.1 recorded in 2020.”


The Frugal Generation

Gen Zers get props because they are trying to avoid debt, it seems, at all costs, but many still need to understand that it is important to take on modest, manageable debt early in life to establish a credit history. They still rely on their parents or other adults, for the most part, to help them make financial decisions and often express that the secondary education system is not teaching them financial basics such as how to file taxes or what it means to pay interest.


But even the younger teens of this generation are recognizing the importance of saving money and the importance of working while in college to help control debt. A recent study noted that a whopping 72 percent of Generation Z said they are constantly thinking of ways to make or save money. My daughter Sarah’s favorite hobby has become shopping in secondhand stores and just the other day modeled a stylish business suit she had purchased for $3.50. Gen Zers are savers and 71 percent think they are not too young to start saving for retirement.


Adults who are beginning to breathe a sigh of relief and are seeing those frown lines fade should still think twice, however. While the picture may not be entirely dire, remember that the coronavirus pandemic has, of course, thrown a sizable monkey wrench into all of this rational thought. A Pew Research Center survey, reported that more than half of Gen Z adults aged 18 to 23 reported that they or someone in their household had entered the ranks of the unemployed because of COVID-19 – considerably more than Millennials, Gen Xers and Baby Boomers.

The kids and young adults of Generation Z may, in fact, be alright in the end, but it certainly won’t be smooth sailing. They still need us to guide them when we should and educate them where we can. There are opportunities for financial institutions to create financial literacy outreach programs as well because many high school students do not feel they are getting the basic economic education they need.


Unfortunately, there are horribly tragic stories that illustrate this point, including one adult Gen Zer who committed suicide after getting caught up in the complexities of the online investment world. Financial institutions need to demonstrate responsible leadership in this area and so do guardians. There will continue to be opportunities for parents to nudge their kids whenever possible to think twice before they buy and we should try to learn along with them because how many of us can really call ourselves financial experts?

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