While inflation has made things difficult for people across the board, young Americans seem to be more affected.

Just how bad is it? One survey showed that 79% of millennials (ages 27 to 42) and 85% of Gen Zers (ages 18 to 26) say they worry about not being able to cover a month of expenses if they lost their primary income compared to 69% of Gen Xers (ages 43 to 58) and 53% of Baby Boomer (ages 59-77).

Here are some other key findings about inflation’s toll on younger Americans’ finances.

Homeownership Feels Out of Reach

Homeownership is a significant milestone that many young people are delaying. About one in five Gen Zers and one in four millennials are put off buying a home, compared to 15% of Gen Xers and only 5% of Baby Boomers. Home prices have almost doubled since 1984, when the median home price was about $79,950 or $228,415 in today’s dollars. But in 2022, the median home price was $454,525. And while housing prices have doubled, household income has only risen by 27%.

Higher home prices left many people with no choice but to rent, and as people emerged from COVID-19 lockdowns, many were ready to move to new cities. This drove rent prices up 15.5% since February 2020.

While increased rent prices didn’t affect people who already owned their homes and were locked in low mortgage rates before they surged, renters were forced to pay more for housing and tend to be young. Add to this the increased costs of everyday goods and services like food, gas, and utilities, and some young people may have a tough time keeping afloat.

Student Loan Debt Is Crushing

Student loan debt is a significant financial barrier for younger Americans, too. About three-quarters of Gen Zers and 68% of millennials said that student loan debt was why they delayed a major financial decision, like buying a house or a car or building emergency savings.

Younger Americans pursued college degrees to find better-paying jobs, and it worked. According to Georgetown University, the median lifetime earnings of those with a high school diploma is $1.2 million; for those with a bachelor’s degree, it’s $2.8 million. But this came with a cost. College tuition and fees have increased by 700% since 1984, so younger generations who wanted to pursue a college education had no choice but to borrow money to pay for it.

Tips to Help Gen Zers and Millenials Meet Their Financial Goals

Here are tips for young Americans still hoping to meet their financial goals, even in these trying times.

1.     Make sure your cash is working for you as much as possible.

No matter how much you have to save, put it into an account where you get the most rewards. Look for a high-yield savings account and take advantage of compound interest. Every dollar counts, and even just the simple act of putting aside a little money can help you feel more confident about the future.

2.     Automate your savings deposits to build good habits.

It can be challenging and may feel hopeless when you start saving. Start by trying to build an emergency fund that will cover six to nine months of expenses, but focus on saving a little bit at a time. Building the habit is part of the journey. Start with a small goal. How are you going to save your first $250? Your first $500? Automating your savings can help you take small, consistent steps toward meeting these goals.

3.     If you’re thinking about making a nonessential purpose, wait 24 hours. If you still want it, buy it. If not, put the money into your savings.

You have to free up some money before you can save any, so the first thing to do is look for places to cut back. Many start by canceling subscription services or vowing not to eat out but consider first thinking about impulse purchases. If you wait a full 24 hours before buying something you want, you may find that you decide you don’t really want it after all. If you do, consider putting the money you would have spent on it into your savings.

4.     Plan entertainment into your budget.

We’ve all heard the line that Gen Zers and Millenials aren’t buying homes because they’re buying $5 coffees and avocados, but they know that these things aren’t what’s preventing them from buying a home. It can be hard for younger people to feel like the economy is always working against them, and it’s important to remember that it’s okay to treat yourself sometimes.

The goal should be to make your money work for you and help you meet your goals. Yes, this includes building an emergency savings fund and saving up for a vacation or an expensive pair of shoes.

5.     Look for ways to boost your income.

Americans who stay in one job for a long time generally do not see salary gains as large as those who move from job to job. Changing companies allows you to negotiate, and you can often get more than you currently make. Look for a new job with higher earning potential. While job hunting, consider a side gig, like delivering for Doordash or Instacart or doing freelance work through Upwork or Fiverr.

6.     Don’t automatically change your lifestyle if you get a raise.

If you get a job where you make more money or get a raise from your current employer, don’t automatically increase your budget. Consider contributing the difference to your savings, especially if you’re just getting started. Doing so will help you build better habits in the future, forcing you to look harder at how you spend your money.

7.     Save for retirement even though you are making student loan payments.

Student debt is a huge financial burden, but if you choose to pay down your loans over saving for retirement, you’ll be hurting your future goals. Pay the minimum on your student loans and invest what you can into your retirement or savings. Every bit of money that you save can make a difference. Take advantage of any retirement matches your employer offers, and start saving as soon as possible.

8.     Build your credit and improve your credit score.

When you have a high credit score, you get better deals from lenders, which can help you get better loan rates in the future. The best thing you can do to build your credit is to make all your payments on time and keep your balances below 30%.

9.     Research home-buyer assistance programs.

If you have never bought a home, you may qualify for some first-time home buyer assistance programs that can make buying a home more realistic. Some loans don’t require a 20% downpayment; if you get a conventional mortgage through Freddie Mac or Fannie Mae and have a strong credit score, you may be able to buy a home with only a 3% down payment. If you’re a veteran, you may be able to take advantage of opportunities through the Department of Veterans Affairs.

10. Relocate to a more affordable area.

If you live in an urban area where rents and the cost of living have increased significantly, consider moving to a more affordable area. Moving can be expensive, but it can save you money in the long run. Flexibility can be an asset, so if you are willing to try a new city or move to a more rural area, it can be an effective way to get ahead.

11.Don’t worry about what you can’t control.

It can be hard to stay positive in a bad economy, but it helps to remember that some things are out of your control. You can’t control when you were born, but you can control how you spend your money. Focus on what you can do right now to help you achieve your goals, and try not to think about how your situation differs from the generations before you. Focus on your opportunities, and try to make things happen for yourself.

Any opinions are those of Thomas Fleishel and not necessarily those of Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.