Abstract
This research examines how shared generational challenges, such as the COVID-19 pandemic, shape Generation Z’s perceptions of their financial futures in the United States. We were particularly attentive to young people’s future orientation—an individual’s image of their future—as they developed aspirations, expectations, and plans for attaining financial independence in adulthood. In-depth interviews were conducted with 32 adolescents and early emerging adults (aged 14–22) from Washington State who were diverse in race and gender. We found that participants perceived the instability of the economic system in the U.S. as restricting Generation Z’s ability to imagine and prepare for financial independence later in life. Participants responded to economic constraints, such as rising living costs and education, by altering their expectations, aspirations, and plans for their futures. These findings have implications for Generation Z’s developmental transition to adulthood.
Keywords
Introduction
The transition to adulthood—roughly ages 14 to 24—offers opportunities for growth and exploration (Arnett, 2024; Berk, 2022). Developmentally, adolescents and young adults envision aspects of their future related to milestones such as educational goals, career aspirations, and life benchmarks (Beal et al., 2016; Seginer, 2009). It is also a time when they cultivate economic aspirations and strive toward attaining financial independence, widely regarded as a crucial indicator of adulthood in the U.S. (Serido et al., 2023; Sironi & Furstenberg, 2012). Yet, alongside these aspirations, social and economic forces play a critical role by either facilitating or hindering the path to financial independence (Serido et al., 2015; Settersten, 2012). This interplay highlights the need to view financial independence as an outcome shaped by individual aspirations and external factors.
Generation Z—the cohort of young people born between 1995 and 2012—is navigating the transition to adulthood in an era marked by significant economic challenges. While the COVID-19 pandemic has notably impacted this generation, particularly for those in educational settings or on the cusp of entering the workforce (Allmang et al., 2022; Aucejo et al., 2020), it represents just one part of the larger economic picture they face. Issues like the rising cost of living, high educational expenses, and changes in the job market also add to the financial challenges of Generation Z (Lee et al., 2020; Scott et al., 2021). This broader context raises questions about how various national economic events shape Gen Zers’ pathways to financial independence during this crucial life stage.
In this paper, we investigate young people’s perceptions of their financial futures. We define “financial futures” as their anticipated economic trajectories in adulthood, primarily focusing on achieving financial independence and stability goals. Here, financial independence and stability entail the ability to cover living expenses through one’s income and to manage unexpected financial demands without undue stress (Butterbaugh et al., 2020; Lee & Mortimer, 2009). These concepts significantly shape young people’s perspectives, which are influenced not only by their aspirations but also by external factors such as the national economic environment. Together, these elements form a complex backdrop against which young people envision and prepare for their financial lives as adults.
We examine the impact of the economic environment in the U.S. on young people’s financial futures through in-depth interviews with 32 adolescents and early emerging adults aged 14 to 22. Our focus extends to understanding how they perceive and plan for their financial futures as they mature into adulthood, especially in the context of financial challenges faced by Generation Z. Utilizing future orientation as our analytical lens—a construct that encompasses an individual’s expectations, aspirations, and plans for future life events—we examine how adolescents and early emerging adults perceive their path to financial independence in adulthood. The paper concludes by offering recommendations for research and practice to support young people through these crucial developmental phases.
Future Orientation and the Transition to Adulthood
Future orientation, or the image individuals have of their future, provides the foundation for young people to set goals and plans (Bandura, 2001; Nurmi, 1991; Seginer, 2009). This concept gains particular importance during middle adolescence (ages 14–17) and early emerging adulthood (ages 18–22), where individuals engage in setting goals and contemplating major life decisions (Munson et al., 2013; Seginer, 2009; Sharp et al., 2020). During middle adolescence, young people begin preparing for adult responsibilities by making more decisions around choosing whether to pursue higher education (Carey, 2022) or developing social relationships (Flynn et al., 2014; Wigfield et al., 2006). In early emerging adulthood, this process deepens with decisions about long-term professional goals and planning for financial independence later in life (Schoon & Mortimer, 2017). Future orientation begins to play a more significant role in these decisions as people grow older—for example, as some young people develop increased clarity about their future interests in middle adolescence, they may simultaneously develop strategies to achieve goals related to these interests in early emerging adulthood (Seginer, 2009; Sharp & Coatsworth, 2012).
Expectations regarding roles and responsibilities shape the development of future orientation in adolescence and early emerging adulthood. Historically, milestones such as self-reliance and the ability to provide and care for a family have been critical indicators of adulthood in the U.S. (Arnett, 2004; Culatta & Clay-Warner, 2021; Lowe et al., 2013). However, contemporary societal changes, including delayed marriage and higher educational attainment, have led to a more fluid path to adulthood today (Cepa & Furstenberg, 2021). This fluidity often results in extended and unstable transitions to independence, eroding some young people’s self-esteem as traditional markers of adulthood are reached later in life (Schoon & Mortimer, 2017; Sharon, 2016). These disruptions can ultimately shape a young person’s future orientation by reducing optimism about accomplishing goals and beliefs in control over future events, such as being financially independent in adulthood (Settersten et al., 2020).
Understanding different social experiences across demographic groups is also critical for adolescents’ and early emerging adults’ development and execution of future-oriented decisions. For instance, economic inequality can make marriage and achieving financial stability in adulthood more readily attainable for young people with high socioeconomic status (SES) compared to those with low SES (Cepa & Furstenberg, 2021; Cooper & Pugh, 2020). The intersection of other contexts—such as race/ethnicity and immigration status—can also shape young people’s aspirations. For example, Cansler et al. (2012) found that Mexican-American adolescents from higher SES backgrounds and with a longer residency in the U.S. reported more ambitious educational and career goals than their peers from lower SES backgrounds and shorter residency in the U.S. These adolescents likely benefit from financial support and cultural experiences that shape their future educational and professional goals. These findings suggest that varied social experiences significantly influence young people’s perspectives on their futures.
Generation Z’s Financial Experiences in the U.S.
Generation Z faces a challenging economic landscape, marked by the lasting effects of the 2008 Great Recession (Seemiller & Grace, 2018) and the recent COVID-19 pandemic (Graupensperger et al., 2022). Compounding these challenges are skyrocketing non-discretionary costs and increasing debt, contributing to a widening wealth gap and erosion of the middle class (Carlson, 2020). In response, many Gen Zers have gravitated toward the gig economy to bolster their economic standing (McKee-Ryan, 2021). However, these jobs often offer limited career advancement and may present a significant hurdle for members of Generation Z who are at the outset of their careers (Huang et al., 2020).
The COVID-19 pandemic has further amplified the economic challenges faced by Generation Z. This crisis resulted in job loss for adolescents and early emerging adults worldwide (Li et al., 2023), leading to increased financial stress and a rise in mental health concerns (Argabright et al., 2022; Demkowicz et al., 2022; Pearcey et al., 2023). Recently, the U.S. economy displayed recovery signs from the pandemic, such as low unemployment rates and rising wages (Essien et al., 2023). However, this positive trend masks ongoing struggles for adolescent and early emerging adult workers, who continue to encounter higher unemployment and underemployment rates than their older counterparts (Gould et al., 2023). While wages have increased in the recovering economy, the current inflationary pressures offset this improvement (Essien et al., 2023). Inflation significantly diminishes the actual value of wage gains, further complicating the financial situation for young people (Atran, 2023).
Amid these broader economic challenges, Generation Z is increasingly faced with the escalating costs of higher education (Horowitz, 2018). Tuition and fees in the U.S. have surged by 40% at private universities and 56% at public universities over the past two decades (Kerr & Wood, 2023). This steep rise in education expenses has ignited debates on the value of a college degree as industries increasingly seek skilled workers in the face of an aging trade workforce (Hemelt & Marcotte, 2016). Despite this, most younger Gen Z students still view higher education as critical, with 62% planning to pursue college degrees post-high school (Gallup, 2023). Yet, the soaring costs of higher education make it an onerous financial burden that is out of reach for many young people (Jacob & Gokbel, 2018).
Not surprisingly, national economic challenges can undermine Gen Zers’ future outlook (Schoon & Mortimer, 2017). The COVID-19 pandemic has added to these complexities by reshaping adolescents’ and early emerging adults’ goals for postsecondary education and careers (Andrade & Fernandes, 2022; Ashta et al., 2023). Beyond immediate concerns, the pandemic’s impact is evident in some young people’s heightened anxiety about the future, with these feelings varying in response to broader social forces such as familial responsibilities (Carey et al., 2023). These findings suggest that the compounded stressors of the pandemic and national economic challenges may influence how young people envision and strategize future life events.
Conceptual Framework
We draw upon Lindstrom Johnson et al.’s (2014) conceptual framework that situates future orientation development in life history and sociocultural influences. In most models of future orientation, developmental context is the backdrop against which adolescents and early emerging adults develop expectations about their future (Nurmi, 1991; Seginer, 2009). However, larger sociocultural influences can also shape young people’s orientations toward their futures (Lindstrom Johnson et al., 2014). The role of sociocultural influences becomes more pronounced in the face of national challenges like the COVID-19 pandemic, which has markedly altered how some young people view and plan their futures.
Lindstrom Johnson et al.’s (2014) model includes three components that develop over the lifespan: expectations (a young person’s perceptions of the future), aspirations (intentions for the future), and planning (ability to create action plans for goals). The model includes a horizontal axis, showing that future orientation develops across the lifespan. It also includes a vertical axis illustrating that individual attributes (labeled as competencies) and sociocultural influences (labeled as opportunities and constraints) shape future orientation. In our study, we applied this framework to examine how economic constraints affect young people’s aspirations, expectations, and plans for their financial futures. This approach helped us understand how these constraints shape young people’s financial outlook as they transition into adulthood.
Current Study
Generation Z is entering adulthood amid notable economic challenges, including the effects of the Great Recession (Seemiller & Grace, 2018) and the recent impacts of the COVID-19 pandemic (McKee-Ryan, 2021). The economic experiences of Gen Xers and Millennials are well-documented (Johnson et al., 2017; Mortimer, 2005). However, there is a gap in understanding how Gen Zers navigate economic uncertainty, particularly in developing future orientation. Our study aims to address this by examining the role of sociocultural and economic factors—referred to as “generational constraints” in this paper—in shaping future orientation. We focus on how they perceive and plan for their financial futures amidst these uncertainties.
To accomplish these goals, we interviewed 32 adolescents and early emerging adults aged 14 to 22, exploring their perspectives on shared generational constraints and personal finance. While we conducted these interviews during the COVID-19 pandemic, the pandemic served as a contextual backdrop rather than the central focus of our study. Our primary aim was to explore Generation Z’s broader economic challenges and individual experiences in navigating these constraints, with the pandemic as one influencing factor. Our research is driven by two questions: (1) What do adolescents and early emerging adults perceive as the challenges Generation Z faces in achieving stability? and (2) How do these generational constraints shape adolescents’ and early emerging adults’ expectations, aspirations, and plans for their financial futures?
Method
Participants
Data for this article was collected as part of a larger mixed-methods study of adolescent and early emerging adult experiences with financial education in Washington state. The larger study involved a survey on participants’ financial knowledge and goals for financial independence, which informed the development of interview questions. Participants were recruited into this study’s interview and survey portion at different times and using different recruitment strategies. The survey sample (not reported here) was recruited through emails to Washington state educators, who then shared information about the study with their students. The larger study focused on participants from Washington state because, due to a lack of state-mandated curriculum, young people have varying experiences with financial education in schools (Dorn et al., 2016). This diversity offered a unique opportunity to evaluate the impact of different financial education experiences in the larger study.
In the current research, we explored the interview part of the study, delving into participants’ personal finance experiences, socialization around money, and financial goals. We recruited participants through purposive non-random sampling by targeting individuals aged 14 to 22 who attended high school in Washington state. Our recruitment strategy was multi-tiered: We established partnerships with two local youth-focused community organizations—foundry10 and Young Women Empowered (Y-WE)—to access a diverse and engaged youth population. These organizations are deeply integrated into local communities and have established trust with adolescents and early emerging adults, making them ideal partners for reaching our target demographic. We also contacted teachers and educators, utilizing their connections with students. To further expand our sample and widen our recruitment reach, we used snowball sampling by encouraging participants to refer their peers.
Recruitment materials included a poster that provided information about the study and contact information for study participation. Announcements about the study were also made at youth events hosted by foundry10 and Y-WE (i.e., an internship program for high school and college students and a summer camp, respectively). If youth were interested in participating, they emailed the research team. For individuals younger than 18, the research team provided caregivers with information about the study and allowed them to accept their youth’s participation. Participants under 18 provided written assent, and adults over 18 provided written consent. Participants could opt out of the study at any time.
Our study sample consisted of 32 young people between the ages of 14 and 22 (M = 18.3 years, SD = 2.4 years; see Table 1 for participant demographics). Among them, 17 (53%) were high school students, with a higher concentration in the 11th and 12th grades. Regarding racial/ethnic representation, the sample identified predominantly as Asian American (44%) and European American/White (31%). A majority of participants came from households where the highest level of parental education was a graduate degree (53%), signifying a background of relative affluence within their family environments. Most participants lived in urban areas in Washington state, such as King and Snohomish counties, where individuals with a college degree or higher are 56% and 39%, respectively (U.S. Census Bureau, 2022a, 2022b).
Participant Demographics.
Note. One participant did not provide demographic data.
Our study selected the age range of 14 to 22 to capture evolving experiences with personal finance in key developmental stages within Generation Z: adolescence and early emerging adulthood. We began with high school students (ages 14–17), a key phase when formal financial education typically starts, to understand their attitudes and future expectations about personal finance. Subsequently, our attention turned to early emerging adults (ages 18–22) applying this education in real-world contexts such as college or early career stages. This age-range was chosen to capture pivotal developmental stages where foundational financial attitudes form and to provide an in-depth exploration of financial experiences during these years (Beutler, 2012).
Interview Procedure
Three researchers conducted in-depth and semi-structured interviews with participants from June 2020 to February 2021. A semi-structured interview guide, developed in collaboration with youth development researchers and educators, was used to conduct interviews. Participants were asked seven open-ended and 15 probing questions about their perspectives on personal finance, including challenges in managing their finances during these formative years. We encouraged participants to reflect on their own experiences and the broader experiences of their peers. This approach provided a comprehensive understanding of individual and collective perspectives about personal finance.
The interview questions were designed to understand how generational constraints influence participants’ views on finance and their confidence in attaining financial independence later in life. For example, we asked questions like, “What are some of the biggest opportunities and challenges for your generation regarding money and finances?” to understand participants’ views on their generation’s economic landscape and “How has COVID-19 impacted the way you think about money?” to assess the pandemic’s influence on their future financial outlook. Each interview ranged from 50 to 60 min, and participants received a $25 incentive for their participation. Data collection ended when data saturation occurred. See Table 2 for examples of interview questions.
Example Interview Questions and/or Prompts.
Analytical Approach
Our analysis of the interviews utilized a two-pronged approach. First, we applied an inductive method for thematic analysis to develop themes from participant responses (Braun & Clarke, 2006). This process aimed to uncover patterns in young people’s experiences with generational challenges in personal finance, moving beyond simply recording their statements to a deeper examination of participant descriptions. In our thematic analysis, we also incorporated social constructionist strategies (Braun & Clarke, 2006; Braun et al., 2014; Creswell & Poth, 2017). This approach ensured themes and sub-themes highlighted elements that emerged through collective analysis. We used this approach in analyzing how participants described generational constraints to financial stability and independence, forming the first part of our findings.
In the second phase of our analysis, our focus shifted to participants’ individual experiences. We utilized Lindstrom Johnson et al.’s (2014) framework, which outlines three aspects of an individual’s future orientation: expectations, aspirations, and planning. This model helped us understand how adolescents and early emerging adults conceptualize their futures. “Expectations” involved examining participants’ perceptions of their future, like hope or pessimism. “Aspirations” focused on their intentions for the future, while “planning” examined their strategies to achieve these goals. We applied this approach to categorizing how participants viewed their financial futures, forming the second part of our findings.
Analysis Procedure
Following guidelines of thematic analysis (Terry et al., 2017), coding was a flexible process in which codes were developed as we engaged closely with the interviews. This approach foregrounded interpretations of qualitative data at the intersection of participants’ experiences and researchers’ prior disciplinary knowledge. Quality-assurance strategies involved collaborative reflection to ensure emerging themes and sub-themes had supportive data across interviews. Dedoose version 4.12, a qualitative data management software, was used for coding.
Our analysis strategy for the interviews was comprehensive and multi-layered. We adopted a six-step iterative process to ensure a thorough examination of the data. In the first step, six researchers independently reviewed all interview transcripts to gain an in-depth understanding. Subsequently, in pairs, researchers worked together to develop codes related to assigned sections of the interview questions. Researcher pairs met to discuss preliminary codes, discussing areas of agreement and disagreement until a consensus was reached. The entire research team met to discuss the initial codes developed by pairs.
In the third phase of our analysis, coders independently applied codes to each transcript, with two researchers coding each one to identify discrepancies and reach consensus. This was followed by the fourth phase, where the research team met multiple times to comprehensively review all transcripts and coding, compiling examples and grouping them into preliminary categories. These collaborative sessions served as a form of member checking, ensuring the reliability of our coding. Building on this, the fifth stage involved refining the interview excerpts and arranging them according to the established preliminary themes.
In the sixth phase, we thoroughly reviewed each theme’s content, forming final themes and sub-themes substantiated by data. At this stage, we brought in Lindstrom Johnson et al.’s (2014) framework to categorize themes and sub-themes related to how participants describe their financial futures. We divided these three categories into sub-themes based on the framework: “expectations,” “aspirations,” and “planning.” “Expectations” related to participants’ beliefs about their financial futures, while “aspirations” captured their long-term financial goals, like career success or financial stability. “Planning” covered strategies and methods for achieving their desired financial futures, such as budgeting and saving. Employing this framework aligned with our objective of investigating how these social and economic factors affect the development of young people’s financial futures.
Researcher Positionality
The composition of our research team, which included two Generation Z members (AT and KC) and one Millennial (JR), was important to our study’s approach. AT and KC, recent college graduates and natives of Washington state, provided insights from their experiences as Gen Zers growing up in the area. Their perspectives enriched our understanding of participants’ experiences, particularly in discussions on personal finance topics. Additionally, their multiracial backgrounds (Chinese American/White) may have enhanced rapport-building and understanding of nuances within our diverse participant group, particularly those who are Asian American.
JR, a Latina and first-generation college graduate, provided a broader generational viewpoint to the study. Her insights and expertise as a developmental psychologist were instrumental in capturing the subtleties of generational shifts in financial perspectives. This expertise complemented and enriched the interpretations made by her Generation Z colleagues, adding depth to the study’s analysis. Throughout the study, we remained conscious of our roles and relationships with participants, reflecting on how our backgrounds might influence the research process. This reflexive approach was key in ensuring that our personal experiences enriched the research, providing a balanced understanding of the topics explored.
Findings
This article reports two larger themes: (1) Generational constraints to financial stability and independence capture participants’ perceptions about challenges Generation Z faces around personal finance, and (2) Expectations, aspirations, and planning for one’s financial future report how participants coped and adapted to these challenges. Within these larger themes, we report several sub-themes. We discuss differences in participants’ responses based on their developmental age if they naturally emerged in the data. See Table 3 for a summary of themes and sub-themes.
Summary of Themes and Sub-Themes.
Generational Challenges to Financial Stability and Independence
We examined participants’ descriptions of the role of sociocultural and economic constraints in Generation Z’s current and future finances. We categorized participants’ experiences into three main sub-themes: recent changes in financial systems, precarity of the job market, and limited access to financial education.
Recent Changes in Financial Systems
Throughout the interviews, young people described how recent changes in the U.S. economy—including in the stock market, higher education, and non-discretionary costs—present challenges for Generation Z’s current and future finances. Concern over the stability of these financial systems emerged as a common refrain from participants. Alisa, a 17-year-old high school student (girl, Asian American/Asian), shared how the pandemic changed her perspective on financial systems such as the stock market: I think there’s a lot more uncertainty with COVID-19 . . . I was really young when the second recession back in, I think, 2008, so [the pandemic] is kind of my first real exposure to the uncertainty of just like stock markets and how that affects a lot of the economy in general.
Although some members of Generation Z may have witnessed the 2008 recession’s impacts on parents and family members, most were not old enough to fully comprehend the broad implications of economic instability. Now, as adolescents and early emerging adults, Gen Zers are positioned to experience real impacts from a recession. Alexa, a 22-year-old college graduate (woman, multiracial), described how since the pandemic, she has become “more aware that the general economic climate in the country also affects my personal finances.” Alisa and Alexa’s perspectives illustrate that Generation Z views recent economic shifts due to the pandemic as barriers to their financial stability. This widespread economic instability provides an uncertain backdrop for Gen Zers as they navigate life decisions in adolescence and early emerging adulthood, such as exploring careers and education.
In addition to the pandemic’s economic conditions, participants described how rising tuition costs increased pressure on their generation’s financial decisions. For example, Bryan, a 16-year-old high school student (boy, European American/White), explained how rising costs in education could impact Gen Zers’ finances during the transition to adulthood: “College is built up as essential for being able to work anywhere . . . One of the biggest barriers is that college costs a lot and you might be starting out your adult life in debt.” Bryan’s perspective highlights two significant constraints felt by Generation Z: the importance of a college degree for employment and the high cost of tuition. These constraints force young people to weigh their educational goals and future career paths against their financial needs.
Participants also identified how rising non-discretionary costs like housing and groceries may challenge their generation’s financial futures. For instance, Clara, a 19-year-old college student (woman, European American/White), discussed her generation’s increasing living costs. “For our generation . . . I do think that things are getting more expensive as we keep living,” she shared. “I remember when even milk we bought at the store was cheaper than it is now, which feels crazy . . . If it’s this bad now, how bad is it going to be when I actually have to pay all my own things?” Clara’s worries depict how inflation, most recently from the pandemic, has contributed to surging non-discretionary costs for Generation Z that may continue to rise. Overall, these responses suggest that an awareness of macroeconomic shifts may play a role in Gen Zer’s financial development and view of what is possible in the future.
Precarity of the Job Market
Participants discussed how the precarity of the job market limited their generation’s ability to maintain a stable income. Many participants described how the COVID-19 pandemic contributed to more variable earnings and less stable employment for those already in the workforce. These concerns were primarily raised by early emerging adults in our sample, as many were currently navigating the transition from higher education to the workforce. For example, Sean, a 22-year-old recent college graduate (man, European American/White), explained how this precarity contributed to his financial insecurity: “[COVID has] made me really keep a close eye on making sure that I don’t accumulate any recurring expenses . . . it made me hyper aware that my income could go away at any time.” Similarly, Caitlin, a 22-year-old college student (woman, European American/White), noted how the current gap in the job market during the pandemic added to her unstable financial situation: I was really worried that I wouldn’t have a position that I would be able to get some kind of income from . . . [and] about being able to pay for [school] because there aren’t going to be a lot of jobs open . . . There’s a pretty big gap in the job market right now.
Both Sean and Caitlin’s experiences illustrate how the pandemic has contributed to unreliable earnings and employment as older members of Generation Z enter the workforce.
Some participants, like Alisa (17-years-old, girl, Asian American/Asian, some high school), also identified how the shifting norms of the labor market to a gig economy further contributed to Generation Z’s struggle to secure a stable job: Especially for my generation, there’s kind of a shift towards a gig economy. And then that kind of makes it a bit difficult to . . . really plan out your finances if you’re shiftin [sic] from job to job or thinking about work in a less stable way.
Alisa’s point emphasizes that the rise of the gig economy has limited Gen Z’s opportunities for stable long-term employment. Instead, some young people are turning to gig work, which is often part-time and short-term, without reliable hours or benefits. As Alisa described, the increase in informal and temporary employment opportunities may limit Generation Z’s ability to achieve financial stability as they transition to adulthood.
Limited Access to Financial Education
Young people described how current social and economic contexts limit Generation Z’s access to high-quality financial education. Most participants did not have formal financial education experience. Of the 32 participants, 28 had not received formal financial education from school or had only received information as part of a unit in another class. Young people consistently cited macro-level influences when describing access to education, suggesting that they view it as a barrier for their generation as a whole, not just for them as individuals.
Despite young people’s lack of financial education experience, participants expressed a clear desire for more structured education opportunities. Sebastian, a 17-year-old high school student (boy, multiracial), identified the lack of personal finance curriculum in schools as one of the primary barriers to Gen Z’s financial futures: “Being uneducated about finances is also a big barrier because we don’t have a necessary class that you need to take in high school.” As Sebastian’s comment illustrates, participants generally viewed formal education (e.g., personal finance class) as the most valuable type of financial preparation. Although participants discussed receiving financial information from other places, such as family and media sources, they emphasized the importance of more structured education at school.
Participants specifically described a lack of education opportunities that would prepare them for adulthood. As Justin, a 16-year-old high school student (boy, Asian American/Asian), said, “I feel like it’s [personal finance] something really important and that teenagers need to know . . . I don’t want to go into adult life not knowing how to pay my bills.” For Gen Zers like Justin, personal finance education is an essential step toward feeling prepared to handle the responsibilities of early emerging adulthood. Participants felt uncertain about their future financial prospects without reliable access to these opportunities.
Participants described how even when personal finance classes are available in schools, competing priorities sometimes limit students’ ability to take advantage of them. Several participants, such as Danielle, a 21-year-old college student (woman, Asian American/Asian), shared how the increasing importance of a college degree can cause Gen Zers to deprioritize financial education: For my generation, we’re just so focused on getting into college . . . [In the past] a college education wasn’t as needed in the workforce, but now, more jobs are looking for BS degrees or even Master’s. I guess focusing on school so much kind of leaves less time to learn about finances.
Danielle highlighted that changes in the job market have driven many high school students to focus their energy on preparing for higher education rather than seeking financial education opportunities that could help them after graduation. Ranjit, an 18-year-old college student (man, Asian American/Asian), also reflected on this tension that high schoolers feel: “A lot of students are thinking about ‘how does my schedule look to colleges when I’m applying?’ . . . I don’t think [financial education] is something that students really see as valuable to them in the long term.” Ranjit’s experience underscores the difficult decisions students face as they prioritize college admissions preparation over the importance of financial education, which may go unnoticed amidst the intense pressure to secure a spot in higher education institutions. Taken together, Danielle and Ranjit’s perspectives highlight how the pressure to attain a college degree and the increasing competitiveness of college admissions can prevent some Gen Zers from accessing financial education, even when their school offers those opportunities.
Some participants described how inequalities within the broader education system impact the accessibility of financial education for young people. For example, Clara (19-years-old, woman, European American/White, some college) said: “I think private schools probably have more classes on [personal finance]. I mean, our personal finance class, it was a semester long and then they didn’t teach it again . . . it didn’t last.” Clara’s perspective highlights that inconsistencies in the availability of these courses may be connected to systemic factors, such as schools’ funding and resources. Caitlin (22-years-old, woman, European American/White, some college) added that the quality of financial education opportunities also varies based on these factors: “The level of inequality that we’re especially seeing right now in the world translates not only to actual financial inequality, but the quality of our financial education.” Clara and Caitlin’s perspectives highlight that, although young people see access to education as a shared generational constraint, they also understand that individuals’ educational experiences may vary significantly based on contextual factors, such as socioeconomic status and neighborhood.
Expectations, Aspirations, and Planning for Financial Independence
We examined the role of these generational constraints in how participants envisioned and prepared for their financial futures. In this section, we used Lindstrom Johnson et al.’s (2014) framework to focus on three aspects of participants’ future orientation: expectations, aspirations, and planning. Using this framework, we identified several sub-themes from the interviews: expectations about financial prospects later in life, aspirations for participants’ future finances and careers, and planning for financial independence in adulthood.
Expectations About Future Financial Prospects
As young people transition to adulthood, they develop positive (e.g., optimism) and negative (e.g., pessimism) expectations about what they believe the future will hold for them (Lindstrom Johnson et al., 2014). Participants in the current study discussed how constraints stemming from the COVID-19 pandemic and the lasting effects of the 2008 Great Recession altered their expectations for their career path and personal finances in adulthood. Specifically, participants described feeling pessimistic about their generation’s ability to achieve job stability and reach financial goals.
Participants articulated their understanding of the normative path for attaining financial independence in the U.S. Sierra, a 17-year-old high school student (girl, European American/White), envisioned “going to college, maybe getting some internships there, and then finding my way to a long term job after college . . . I kind of see that as the path.” However, Sierra also described how job precarity resulting from the COVID-19 pandemic challenged her expectations about the feasibility of this path: “Especially if you are just joining a job, you may be laid off . . . I’d really like the idea of staying in a job and having a stable income, but then something can always happen and then that could be disrupted.” Sierra’s sentiments encapsulate how young people envisioned themselves transitioning to adulthood and the larger economic challenges that disrupted their expectations for this path.
A common refrain from participants was that they felt pessimistic about attaining a stable job in the future that would allow them to support themselves. Several participants, such as Justin (16-years-old, boy, Asian American/Asian, some high school), discussed how the pandemic had created feelings of uncertainty: You see people that are losing their jobs just like that. And then you worry because you can see people become homeless overnight . . . I think about that sometimes where it’s like I could be doing so well, but one situation could completely change that.
Justin’s perspective emphasizes that factors outside his control—such as the pandemic or other economic recessions—might disrupt his financial and career plans. Participants also discussed how they felt one salary would not be enough to support them due to the precarity of the job market. For instance, Naiomi, a 16-year-old high school student (girl, Asian American/Asian), talked about how economic instability resulting from the pandemic strengthened her belief that young people should have multiple streams of income: The pandemic reinforced my interest in learning about other sources of income other than your main income. I already knew that your employment is very unstable . . . So I don’t think you should only have your main source of income.
Naiomi’s belief in the importance of multiple sources of income rests on the expectation that future job opportunities will be unstable and unreliable. This perspective reflects participants’ overarching sense of pessimism about future job security as they transition into adulthood.
Ultimately, participants believed that rising living costs and lack of job stability would contribute to them reaching normative benchmarks of adulthood later than previous generations. For example, Caitlin (22-years-old, woman, European American/White, some college) discussed how her generation would face a more challenging future than previous generations due to changing economic conditions following the 2008 recession: There’s a general weird attitude toward our generation when it comes to money. People have this concept that we’re very ungrateful for what we have or that trope of, well, back in my day we did this, but the things are more expensive now and things are becoming more and more inequitable, and so it’s harder to attain those goals that people achieved. Most people in my generation probably won’t own a house until they’re in their 50s, whereas their parents or grandparents owned a house in their 30s or younger.
Though many participants expressed hopes of following a normative path to adulthood, economic challenges such as the job market and rising living costs contributed to young people’s hopelessness about their generation’s ability to attain this future.
Aspirations for Future Financial and Career Goals
Based on the expectations young people hold for the future, they form aspirations for their future selves. Whereas expectations are beliefs, aspirations are young people’s intentions for the future that can guide decision-making (Lindstrom Johnson et al., 2014). In the interviews, participants discussed how generational constraints such as job precarity and the cost of living factored into their aspirations of financial independence and career stability.
Though participants generally held pessimistic expectations about their generation’s future financial prospects, many participants expressed the intention of becoming financially independent from their families. Participants saw financial independence, alongside general economic stability, as key aspirations for their future. Vivek, a 14-year-old high school student (boy, Asian American/Asian), described his hopes for and conceptualization of financial independence: “Not need[ing] the help of others to sustain myself. Being able to pay my expenses and being able to live by myself, using my own money without being suppor[ed by] others.” As Vivek described, participants hoped for a future as adults with enough money to support themselves and live independently without outside financial support.
Participants described how their hopes for their financial futures shaped their career intentions. Indira, a 22-year-old college graduate (woman, Asian American/Asian), explained how money factored in her career decisions: If I get my [own] place that is going to be a huge chunk of my paycheck . . . Just thinking about that makes me want to earn more. And I think it makes you want to adjust the sort of professions that you are interested in for that reason.
For Indira, facing the realities of financial independence, such as covering her living expenses, prompted her to rethink her career path. Indira’s perspective illustrates how young people consider multiple factors—including their financial goals and broader outlook—when determining their future career aspirations.
In particular, young people talked about their intention to pursue a career path leading to financial stability. For example, Ranjit (18-years-old, man, Asian American/Asian, some college) described how the precarity of the COVID-era job market shifted his career aspirations: I’ve found my parents worrying about their own job and so that’s never something that I’ve really seen them do before. It really made me think about job security in the future and making sure that I get a stable job that I can rely on and saving enough money to make sure that if something like that does happen, I’m able to take care of myself.
Ranjit’s career aspirations exemplify how participants prioritized career paths they believed would lead to more financial stability. Due to the economic instability resulting from the pandemic, participants felt that a stable job was necessary to achieve financial independence and adjusted their vocational aspirations to meet that goal.
In describing their career aspirations, some participants shared how their backgrounds—such as their socioeconomic background or immigration status—informed their decision-making around future financial and career goals. For instance, Thi, a 19-year-old college student (non-binary, Asian American/Asian), described how their perspective as an immigrant to the U.S. shaped their hopes for the future: My dream job is to be a comic artist, but I did some research and found out that being a comic artist is not a well paid job in the U.S. So I went for my second dream . . . It has higher salaries and I think it’s more stable. The demand of a visual development artist is higher than a comic artist.
As a Vietnamese immigrant, Thi prioritized their desire for a stable and well-paying career over their passion when determining their career plans. While Thi was able to find a career path that compromised between financial stability and personal interest, some participants, like Tessa, a 20-year-old college student (woman, Middle Eastern American/Arab), made more drastic changes to their career ambitions in prioritizing financial goals: I do want to be an artist, but I can’t . . . Right now, I’m on the path to nursing and that decision is not because I want to. It’s because . . . being a nurse is the quickest way to get a green card so I could not only stay here, but make money. So my career is entirely surrounded by the fact that I need to have money when I grow up.
For Tessa, whose family currently lives in the U.S. on a visa, the need for a career that would provide financial stability and the ability to stay in the U.S. entirely outweighed her interests. Thi and Tessa’s experiences illustrate the dynamic interplay between young people’s future expectations and contextual influences like family background in shaping their career aspirations. These factors can significantly modify their professional goals, guiding them toward career paths that align with their financial objectives.
Planning for Financial Independence in the Transition to Adulthood
Throughout adolescence and early emerging adulthood, young people develop aspirations of financial independence and begin preparing for the responsibilities of adulthood. Individuals’ ability to plan for the future serves an important function as young people envision their future selves (Lindstrom Johnson et al., 2014). Throughout the interviews, participants discussed how coming of age in an era of economic uncertainty cultivated an awareness of the importance of planning for their financial future. However, they felt that economic barriers and the inaccessibility of financial resources limited their ability to create and execute these plans confidently.
Young people described how challenging economic conditions stemming from the 2008 recession contributed to a desire to avoid potentially risky financial decisions. For example, Clara (19-years-old, woman, European American/White, some college) shared how the current economic climate informed her hesitance around debt: I hear all of these horror stories of student loan debt. The articles of people paying it off their entire lives and still not even paying it all off, it’s heartbreaking . . . I kind of made it a point for myself to not take out any student loans unless it’s absolutely necessary. That’s a big reason why I’m saving so much, is because I don’t even want to put myself in the situation where that can become a possibility.
Clara’s perspective illustrates how young people’s early financial experiences may shape their plans for the future. For Gen Zers who have grown up during a time of financial instability, these experiences may contribute to a heightened appreciation for financial planning and preparation.
However, the interviews revealed a gap between participants’ belief in financial preparation and their ability to save for future expenses confidently. Generational constraints such as the rising cost of living and the lack of formal financial education contributed to participants’ difficulties saving money. Sean (22-years-old, man, European American/White, college graduate) described struggling to anticipate and understand his future expenses: Everyone tells me that I’m going to get this accumulation of expenses between various forms of insurance, like your car and your home. And I have a very hard time even estimating what that number is going to look like . . . I don’t even look at the scope of like, am I going to need to earn like X amount to live comfortably?
Without the guidance of formal financial education, young people discussed uncertainty about preparing for upcoming expenses. Clara emphasized how these challenges inhibit her current financial planning: “It’s overwhelming so you’re like, well guess I’ll save as much as I can and hope it’s enough.” Despite young people’s commitment to financial planning, difficulties in anticipating expenses may restrict their ability to save for the future.
Gen Zers’ difficulty planning for the future may arise from an inability to envision their future selves. Throughout the interviews, young people described how current economic conditions limited their generation’s ability to imagine their next stage in development. Ranjit (18-years-old, man, Asian American/Asian, some college) shared how a lack of financial education contributes to Gen Zers’ difficulty preparing for their financial futures: My generation tends to be more short term focused . . . we’re not really able to look forward into the future when we’re on our own. And so I found a lot of friends that go into college, start freaking out about how they don’t know how to pay for their own bills or take care of their own expenses. And so I think since we don’t necessarily have a formal system to learn about these things, people just don’t feel like it’s worth learning.
Without reliable financial education, Gen Zers like Ranjit may struggle to envision and prepare for the financial responsibilities that accompany their next stage in development. Sean echoed this perspective and contrasted Gen Z’s experience with that of older generations: I get the sense that people in previous generations were forced to start tackling their finances and provided with some information a little bit earlier than maybe our generation. Because college is becoming more of a societal norm and that your real life now starts when you’re 22, rather than when you’re 16 to 18. So there’s a lot of people who are exposed to basic finance for the first time when they’re already grown adults.
Sean’s comment emphasizes how recent changes to the economic and educational landscapes have shaped Gen Z’s transition to adulthood in ways that diverge from previous generations. He suggests that the increasing delay of young people’s entry into “real life” discourages Gen Zers from considering the steps involved in attaining financial independence.
Discussion
This study aimed to understand how shared generational constraints shape young people’s expectations, aspirations, and plans for their financial futures. We found that participants perceived the instability of the economic system in the U.S. as restricting Generation Z’s ability to imagine and prepare for financial independence later in life. Participants responded to generational constraints, such as the COVID-19 pandemic and rising living costs, by altering what they envision as possible in their futures. Below, we consider the role of generational constraints in shaping young people’s pathways to their financial futures.
Generational Constraints and Future Orientation
Future orientation is the foundation for establishing hopes, intentions, and goals that steer a young person’s developmental trajectory (Bandura, 2001; Beal et al., 2016; Seginer, 2009). During periods of developmental transitions, future orientation holds particular significance because it provides young people with a sense of direction as they navigate new stages of life and plan long-term goals (Seginer, 2008). Our findings revealed that adolescents and early emerging adults are strongly aware of how events such as the COVID-19 pandemic influence what is possible for their generation in education, career, and finance. Underlying these considerations, young people expressed existential uncertainty and discussed emerging forms of precariousness that may constrain their perception of the future as marked by opportunity.
This study contributes to the literature by showing how factors like rising living costs shape young people’s perceptions of their futures. Previous research has found that young people often overlook societal issues when envisioning their future, perceiving them as unrelated to their lives (Ellis, 2004; Henkens et al., 2022). This can lead to “two-track thinking,” where young people acknowledge a social problem on one track but envision an optimistic future on the other (Norgaard, 2006; Threadgold, 2012). Our findings contrast with previous literature, revealing that participants view their financial futures as intertwined with societal outcomes. This perspective led some to reconsider career aspirations due to rising living costs, while others rethought their financial pathways due to the COVID-19 pandemic. These findings highlight the complexity of young people’s decision-making as they acknowledge broader generational constraints while planning their financial futures.
Our study’s findings gain further depth when considering the specific effects of the COVID-19 pandemic. The pervasive impact of this global crisis has notably intensified the complexities surrounding young people’s future orientation (Carey et al., 2023). Not only has the pandemic reshaped their perspectives on postsecondary education and career plans (Andrade & Fernandes, 2022; Bryce & Fraser, 2022; Jemini-Gashi & Kadriu, 2022), but it has also significantly influenced their future-oriented strategies in personal finance. The uncertainties and challenges posed by the pandemic have led many participants to express feelings of pessimism and anxiety about their envisioned financial futures, suggesting a significant paradigm shift in how Generation Z prepares for its future amidst ongoing global changes.
While older generations have faced financial challenges and global uncertainties (Seemiller & Grace, 2018; Twenge, 2023), the unique economic conditions of today may impact Generation Z’s perceptions of their financial futures more significantly. Many participants expressed uncertainty about achieving financial independence in adulthood, citing specific challenges like the gig economy (McKee-Ryan, 2021), increasing underemployment (Gould et al., 2023), and the rising costs of higher education (Horowitz, 2018). This uncertainty might partly stem from young people being far removed from traditional milestones of financial independence due to their age, potentially affecting their ability to grasp that phase of life entirely. However, recent research offers a broader perspective, indicating that Gen Zers are less optimistic about securing stable occupations, achieving higher education, or surpassing their parents’ wealth than previous generations (Twenge, 2023). These insights suggest that Gen Zers’ apprehensions about the future are rooted not only in their current stage of life but also in a broader concern about the long-term economic prospects for their generation.
Financial Independence and the Transition to Adulthood
Reaching economic independence is a crucial component of adulthood in Western cultures (Arnett, 2000, 2024; Beal et al., 2016). As young people transition into this phase, they may explore identity and self-focus while navigating instability and opportunities (Seginer, 2009; Sharp et al., 2020). However, this period is often tempered by the realities of social and economic forces in the U.S., which can significantly impact access to the financial futures young people envision for themselves (Cherney et al., 2020; Serido et al., 2015; Settersten, 2012).
Not surprisingly, young people in the current research see financial independence as a critical goal in transitioning to adulthood (Arnett, 2000; Beutler, 2012). This finding aligns with previous research that found that young people consider certain milestones associated with self-reliance, such as financial independence and job security, as traditional markers of adulthood (Arnett, 2004; Serido et al., 2023; Sironi & Furstenberg, 2012). Although participants perceive financial independence as essential in “feeling like an adult,” they are also coming of age amid concerns over rising inflation rates, recession fears, and geopolitical conflicts (Scott et al., 2021; Twenge, 2023). The impact of these factors on the lifecourse has the potential to disrupt young people’s attainment of traditional benchmarks of adulthood—such as financial independence and gainful employment—given shifts in the workforce (McKee-Ryan, 2021), rising costs of living (Carlson, 2020), and growing wealth inequality (Seemiller & Grace, 2018). It’s also possible that these barriers may impact young people’s subjective feelings of adulthood—for example, even if Gen Zers reach traditional adulthood milestones, struggles with ongoing financial instability may prevent them from feeling secure.
Our findings also suggest that transitions to adulthood are becoming increasingly fluid and uncertain in an era marked by economic challenges (Kajta et al., 2023; Li et al., 2023; Mazelis & Kuperberg, 2022). Many participants expressed difficulties in planning beyond immediate developmental milestones, such as high school graduation or career initiation. This hesitation often stemmed from a belief that Generation Z might encounter prolonged financial instability, which hinders their ability to envision future life milestones. Additionally, this process was further complicated by social location. For instance, participants from immigrant backgrounds favored stable and well-paying careers over their passions, driven largely by the need for financial security. These findings highlight a complex landscape for young people today: they are simultaneously managing the immediate challenges of their next developmental steps and adjusting their longer-term aspirations to navigate uncertainties.
Recommendations and Future Directions
A promising avenue for intervention lies in expanding the availability and accessibility of financial education programs in school curricula and community programs (Amagir et al., 2018; Frisancho, 2020). Several participants identified limited access to financial education classes as a significant barrier to planning for financial independence, subsequently contributing to their perceived lack of control over their finances. Research indicates that financial education may benefit youth positively—for example, education can increase financial knowledge (Walstad et al., 2010) and beneficial financial behaviors (e.g., lower debt; Kim et al., 2019). Interventions targeting young people’s financial self-efficacy may be particularly impactful given Gen Zers’ persistent uncertainty and hopelessness about their financial futures. By ensuring the widespread accessibility of these educational opportunities, adolescents and early emerging adults can acquire the necessary knowledge to envision and plan their futures.
Beyond interventions, there are several promising areas for future research. First, future studies should explore socioeconomic inequality’s role in shaping future orientation. This entails investigating how factors such as income disparities influence young people’s financial aspirations, expectations, and plans. Gaining a deeper understanding of the role of socioeconomic inequality will provide valuable insights for addressing disparities and fostering positive outcomes for the well-being of Gen Zers in the face of economic challenges.
Another area for future research involves a cross-cultural comparison of Generation Z’s approach to their financial futures. Building on the findings that cultural norms influence financial aspirations, a comparative study between Gen Zers in the U.S. and their counterparts in non-Western countries could provide valuable insights. This research could examine how different countries’ cultural values and family structures affect young people’s views on economic self-sufficiency and intergenerational financial support. Such research could highlight the global diversity of financial independence concepts, offering a broader perspective on how cultural contexts shape young people’s financial planning and decision-making processes.
Limitations
It is important to acknowledge several limitations that should be considered when interpreting this study’s findings. First, the recruitment strategy employed snowball sampling and targeted community sampling, which may have limited the representation of the full spectrum of Generation Z’s experiences. Most of the sample consisted of individuals from families with higher socioeconomic status, as indicated by the highest caregiver education levels. Consequently, the experiences of young people from lower-income families or youth who do not want to attend college were underrepresented in the sample.
Second, the study’s geographic limitation to Washington state may have shaped the findings, as regional contextual factors could influence experiences with personal finance. Expanding the sample to include participants from various regions could demonstrate variations in financial experiences and attitudes, offering a richer and more nuanced picture of how Generation Z navigates economic challenges across different contexts.
Third, this study focused on Gen Zers within the U.S. and their attitudes toward financial independence. However, this emphasis on economic self-sufficiency contrasts with many non-Western cultures, where economic dependence is often viewed as an essential component of communal and familial values (Fuligni et al., 1999; Takagi & Silverstein, 2006). For example, in various Asian, African, and Latin American societies, intergenerational support and strong familial ties are prioritized over individual financial autonomy (Anusik, 2022). Practices such as extended families living together or providing mutual financial support are common in these cultures, reflecting a more collective approach to economic well-being (Kibria, 1998). Therefore, while our findings offer insights into Gen Zers’ perceptions of financial independence in the U.S., they may not apply to young people in cultures where economic independence is not as highly esteemed.
Conclusion
The objective of this study was to examine the impact of shared generational constraints, such as the COVID-19 pandemic, on Generation Z’s expectations, aspirations, and planning for their financial futures. Our findings revealed that the prevailing economic instability in the U.S. significantly constrained adolescents’ and early emerging adults’ ability to envision and prepare for their financial futures. This study, therefore, not only sheds light on the immediate economic concerns of this generation but also raises important questions about the long-term impact of economic constraints on their future financial independence and success.
Research Data
sj-pdf-1-jar-10.1177_07435584241256572 – Supplemental material for Generation Z’s Challenges to Financial Independence: Adolescents’ and Early Emerging Adults’ Perspectives on Their Financial Futures
Supplemental material, sj-pdf-1-jar-10.1177_07435584241256572 for Generation Z’s Challenges to Financial Independence: Adolescents’ and Early Emerging Adults’ Perspectives on Their Financial Futures by Jennifer D. Rubin, Katharine Chen and Allie Tung in Journal of Adolescent Research
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
Supplemental Material
Supplemental material for this article is available online.