Gen Z Debt 12% Higher Than Last Year

Young adults in Central Alabama face debt levels that exceed those of Millennials at the same age, according to data from TransUnion. The figures hold true even after adjusting for inflation. This trend was identified by Ted Rossman, a credit counseling expert.

Rossman works for the nonprofit Money Management International. He reported that the agency saw a 35% increase in demand from Gen Z clients over the past year. Their total debt loads are approximately 12% higher than they were a year ago. These statistics reflect national data that apply to local demographics.

Student loans, high rents, and buy now, pay later plans contribute to the financial strain. Many young adults live paycheck to paycheck with little savings. Rossman described these as early career pressures. He noted that the years of forming a household are expensive, with student loans and high housing costs piling up.

Rossman advised Gen Z to start by knowing their budget and monitoring buy now, pay later spending. This method is popular among people in their 20s, but it remains a form of debt. He warned that it is not a free lunch, even if it offers six weeks of interest-free payments. Borrowers must make payments every two weeks and watch for overspending.

Credit card interest rates, which often range around 20%, also add to the burden. Rossman cautioned about the interest owed on these accounts. He stated that people who feel in too deep can always ask for help. The agency remains available to provide counseling services to those managing these financial challenges.