Gen Z Debt Rose Over Past Year Amid High Costs

Younger households reported more debt and increased stress compared to older generations as inflation and housing costs took a toll.

Updated on Sept. 22, 2026 in Debt Relief

Gouache-painted illustration of a heavy iron house-shaped piggy bank, representing the weight of debt and financial pressure. — Gen Z households reported significantly higher debt levels over the past year, as persistent inflation and rising housing costs impact long-term financial stability. AI Illustration. Upload story photo >

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A survey of 2,000 U.S. adults found that 45% of Gen Z members reported increased debt over the past 12 months. This financial pressure is preventing many young adults from saving or purchasing homes, according to the data.

Why it matters

Rising debt levels driven by inflation and housing costs are forcing many households to pivot their financial planning and limit long-term goals like retirement or homeownership. These pressures are particularly acute for younger generations who cite a lack of financial education and changing government policies as challenges.

Approximately 45% of Gen Z respondents reported higher debt levels over the past 12 months, compared to 34% of Gen X and 30% of baby boomers. About 78% of all surveyed adults cited inflation as a primary driver, while 68% pointed to housing costs.

The players

Gen Z

The demographic cohort most affected by rising debt, with 45% reporting increases over the last year.

Millennials

The generational group reporting a 39% increase in debt over the past 12 months.

Gen X

The group reporting a 34% rise in debt, with 41% now contributing less to their retirement accounts.

The details

Households are managing these debt pressures by cutting back on discretionary spending categories like dining out, clothing, and personal care. Additionally, roughly 25% of Gen Z and millennials have sought side jobs to supplement their income. For older respondents, the strain is specifically impacting long-term security, with 41% of Gen X reporting they have reduced retirement savings due to debt burdens.

The survey covered reported debt changes occurring over the past 12 months.

Money Landscape

This data aligns with broader economic patterns of debt accumulation observed in the Chicago survey. It underscores a shift where essential costs like housing and inflation are increasingly forcing households to reallocate funds away from long-term savings.

Households facing high debt should review their discretionary budget categories like dining and personal care for potential savings. If debt burdens are preventing home purchases or retirement contributions, consider scheduling a conversation with a qualified financial professional to map out a repayment strategy.

The takeaway

The data confirms that inflation and housing costs are the primary drivers of current debt trends for many households. Readers concerned about their own debt-to-income ratio should review their recent statements to identify opportunities to reduce spending and speak with a qualified financial professional.