As record-high inflation continues to put a strain on household budgets, financial burdens are top of mind for many consumers. According to the new Consumer Spending Report from Affirm, a company that offers buy-now pay-later financing, the average consumer now worries about money as often as six times per day.
Spending and money management are top challenges
While consumers say that financial stability is of utmost importance to them, money management is still a challenge. When asked to identify their biggest setbacks, Affirm's survey respondents named several issues related to managing their finances:
- 56% say they often overextend their spending and are left in a difficult position
- 40% of millennials, in particular, say that credit card debt is their biggest financial setback
- 39% of millennials and 35% of Gen Z say that one of their biggest setbacks to achieving financial freedom is not being taught how to budget
What would they give up to be in a better position? As more workers face the possibility of delaying or even giving up on retirement, consumers say they would make significant sacrifices for the chance to retire right away. Nearly half of the respondents in the Affirm survey say they would give up alcohol for five years, while others expressed willingness to give up sex (30%) or their friends (29%).
Respondents also say that money management is important when finding a romantic partner, and this quality is valued even more than physical appearance (45% versus 39%). In addition, 78% of millennials even say they’d break up with a romantic partner who handled money poorly.
Younger generations are more positive about their future finances
In a recent study on college drop-out rates, millennials and Gen Zers reported that financial burdens are a major source of concern and the leading reason they don't finish college. But the results of the Affirm survey reflect a more nuanced relationship with money for younger generations.
While millennials report worrying about money slightly more than other groups — at an average of seven times a day — they also report being the most confident in their finances compared to other generations.
Here are some additional findings on millennials and Gen Z and their feelings on financial matters:
- 79% of millennials say that finances are the area of their lives where they feel most confident
- 78% of millennials are optimistic about where their finances will be ten years from now (versus 73% of Gen Xers, 64% of Gen Zers and 57% of boomers)
- 42% of Gen Z started saving or plan to start saving by the time they hit 25 years old — 28% of millennials, as well as only 17% of baby boomers, said the same
Still, survey respondents of all ages generally feel that younger consumers are in an advantaged position. More than half (53%) think that millennials and Gen Zers are generally better at managing their finances than Gen Xers and baby boomers (33%) — plus, 61% of respondents also say that pandemic life made younger generations more financially savvy.
A 2021 survey from Schwab Retirement Plan Services may support these beliefs. When it comes to healthy financial habits, such as saving money, paying off debt and contributing to retirement, Generation Z had the most positive outlook on adopting these behaviors — despite having its financial well-being disproportionately affected by the pandemic.
Methodology: This online survey was conducted for Affirm by OnePoll in November 2021; the respondents were made up of 2,000 U.S. consumers from the general population. The panel was split evenly by generation, with the age ranges used to define each one as follows: