Born between 1997 and 2012, many members of Generation Z graduated high school or finished college amid a global pandemic and are now entering the workforce during an incredibly uncertain economic climate. Younger members of the generation may not be heading into the job market quite yet, but those same financial responsibilities will eventually fall on their shoulders as well. No matter where you are on the Gen Z age spectrum, skyrocketing inflation, student loan debt, high real estate costs, and more can create financial struggles as you embark on life post-graduation.

A look at the current state of Gen Z’s finances

A recent Credello survey revealed that the financial struggles of Gen Z are causing their parents to delay their own retirement, with a whopping 67% of Zoomers still receiving financial support from their parents. A study from Intuit shows similar findings, including that 63% of Gen Zers surveyed report having financial knowledge but are not sure how to use it.

That’s not to say that Gen Z isn’t doing anything right. The generation’s willingness to explore how a recession will impact their finances and take steps to do something about it before it gets out of hand is clear. So, if financial independence is the goal — and it should be — how can Gen Z get there?

Host of the Journey To Launch Podcast, personal finance expert Jamila Souffrant is a pro at helping individuals launch into financial freedom. In partnership with Secret Deodorant’s No More [Financial] Secrets campaign, Souffrant shared her insights with Credello into how Gen Z can navigate spending habits, tighten their budgets, and get started on the right foot despite the challenges ahead.

1. Create a budget

Not only is this one of Souffrant’s top tips for solving the financial struggles Gen Z faces, but it’s also an actionable step toward building economic resilience in the face of mounting student loan debt, a looming recession, and more. “Establish a detailed budget that outlines income, fixed expenses, and discretionary spending,” she explains. “Track expenses diligently and identify areas where spending can be reduced or eliminated.”

With a budget in place, you don’t have to choose between saving for the future or paying off debt. According to Souffrant, you can simply “allocate a portion of the budget towards savings and debt repayment.”

2. Make debt repayment a priority

Make a plan to tackle existing debt, starting with high-interest debts first,” Souffrant suggests. “Consider strategies like the debt snowball method (paying off the smallest debts first) or the debt avalanche method (paying off debts with the highest interest rates first). Make consistent and timely payments to reduce debt gradually.”

When you’re ready to embark on a debt repayment journey, Credello’s debt payoff calculator can help you stay on track. Use this handy tool for any type of fixed loan to compare debt repayment plans like the debt snowball and avalanche methods.

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3. Create an emergency fund

When making your budget, make sure to set aside money for an emergency fund.Set a goal to build an emergency fund that covers at least three to six months of living expenses,” says Souffrant. “Save a portion of income each month specifically for emergencies. Having an emergency fund helps avoid relying on credit cards or depleting savings in times of unexpected expenses.” Less future credit card debt? Yes, please!

4. Use credit cards with care

Contrary to popular belief, credit cards are not inherently bad. They just have to be used responsibly. Limit credit card usage to essential expenses and emergencies only,” Souffrant recommends. “Avoid carrying a balance whenever possible to avoid accruing high-interest charges. Pay credit card bills in full and on time to maintain a positive credit history.”

When using credit cards, be sure you’re using them to their full potential. Read up on the rewards points systems and perks specific to your credit card. Above all else, learn how credit cards actually work before you use them to avoid costly mistakes.

5. Use tech to help gain control of your money

Remember when Gen Z’s cash-stuffing hack went viral on TikTok? Using social media to learn about your money isn’t the only way to tackle financial struggles. Like most things, when it comes to money matters, there’s probably an app for that! “Take advantage of mobile apps and financial tools that help track expenses, set savings goals, and manage budgets effectively,” Souffrant says. There are apps to help you pay down debt, apps to manage money stress, budgeting apps, apps to help you find side gigs, and so much more.

6. Do a financial cleanse

If you’re already burdened by the financial stress that comes with adulthood as a member of Gen Z, it can be a good idea to take a step back and assess the situation before things get even more out of hand. A financial cleanse can give you time and space to evaluate your finances, prioritize spending, make a budget, and stick to it. Similar to a cleanse you might do for health reasons, a financial cleanse can help you start fresh and gives you a clean slate to build economic resilience for the road ahead.

7. Evaluate and increase income streams

One way to help tackle the financial burden of Gen Z that Souffrant also recommends is to “explore opportunities to increase income, such as taking on a part-time job, freelancing, or starting a side business.” Once you’ve figured out your side hustle, she explains that “this extra income can be directed towards savings, debt repayment, or building an emergency fund.”

8. Negotiate your expenses

Never underestimate the power of negotiation. “Review regular expenses such as rent, utilities, and subscriptions,” Souffrant suggests. “Seek opportunities to negotiate better terms or find more cost-effective alternatives.”

It can be awkward to start these discussions, but sometimes, all it takes is asking nicely. You may be surprised to find out that there are opportunities to save on your expenses in ways you may not have expected. Souffrant also suggests that Gen Z’ers may want to “consider sharing living expenses with roommates to reduce the [financial] burden.” This tactic can definitely work to decrease your expenses, even if it’s just for a short time.

9. Get educated and seek help when you need it

One of the best ways to understand how to navigate your financial struggles is to learn more about managing finances as a whole. In fact — you’re doing that right now! There’s a wealth of information right at your fingertips that can set you up for success if you know where to look.

“Invest time in learning about personal finance and improving financial literacy,” says Souffrant. “Take advantage of online resources, workshops, or courses that provide insights into budgeting, investing, and managing debt effectively like the resources provided through my partnership with Secret.”

Bottom line

Without a doubt, Gen Z faces significant financial challenges now and in the future. But, by adopting smart financial habits and staying informed about how to best go about creating a financially stable future, Gen Z can navigate these obstacles and work towards achieving financial independence and a more resilient money mindset.