Gen Z’s money woes feel like they’ve been a dominant narrative recently, and for valid reasons. Still, that’s supposed to flip on its head in a matter of years.
Right now, the generation born between 1997 and 2012 is facing record high unemployment. Many are dealing with high living costs (which has driven some of Gen Z to continue living with their parents) and struggling to save, leading to broad feelings of disillusionment. But this is temporary. The young generation’s income is expected to multiply soon.
Just two years ago, Gen Z’s income was at $9 trillion. Five years from now, in 2030, it’s expected to quadruple from that number and hit $36 trillion. By 2040, the then-middle age generation is expected to rake in $74 trillion in income. These projections, made in a 2025 Bank of America report, also estimate that Gen Z will be the richest generation by 2035. In other words, the money woes the generation is experiencing now are expected to fizzle out in the years ahead.
“Their consumption decisions and patterns will have a strong influence on the economy,” the bank’s report says. Gen Z’s spending will also shoot up alongside its income. “It’s likely they will be among the most disruptive generations to economies, markets, and social systems. Whether it’s due to changing diets or reduced alcohol consumption or saving and housing, Gen Z will redefine what it means to be a U.S. consumer.”
But there’s a big caveat when it comes to Gen Z’s more robust income ahead.
Some of this income growth is expected to come from wage growth, but most of it is expected to come from what many are calling the “Great Wealth Transfer.” Around $84 trillion is expected to be passed down from seniors and Baby Boomers to Gen X, Millennials, and then Gen Z. In other words, all of Gen Z won’t be seeing green the same. Income inequality levels and the racial wealth gap will almost certainly persist, especially for those without generational wealth.
Only time will reveal how exactly the generation — which famously values more transparency around finances — will navigate the trillions transferred in wealth. What is important is to know that things will all-around get better for Gen Z money, and that’s a reason to stay optimistic: time is on the young generation’s side, and there are many tools to take agency over finances.