• According to a recent survey, 45% of Gen Z respondents said their debt increased in the past year, the highest share of any generation surveyed by Accredited Debt Relief and Money.com.
  • 38% of Gen Z respondents said debt kept them from saving for or buying a home.
  • Across all respondents, 78% cited inflation and 68% cited housing costs as contributors to debt.
Image: Susan Ruggles, CC BY 2.0

Debt is climbing

A July survey of 2,000 U.S. adults with debt found that Gen Z’s debt is rising faster than any other generation's. Respondents said debt is affecting goals such as buying a home, changing careers and starting a family.

Gen Z respondents were more likely than older generations to report rising debt, according to the July survey of 2,000 U.S. adults with debt by Accredited Debt Relief and Money.com.

While 45% of Gen Z respondents said their debt increased over the past year, 39% of millennials, 34% of Gen X and 30% of baby boomers reported increases. Nearly 6 in 10 Gen Z and millennial respondents said they often or always feel stressed about debt.

Image: Stefan Müller, CC BY 2.0

Milestones are on hold

For younger adults, debt is affecting plans beyond their monthly budgets. Among Gen Z respondents, 38% said debt prevented them from saving for or buying a home. Some also reported postponing career changes and plans to start a family.

The findings describe respondents’ experiences, rather than establishing how quickly debt balances are growing across entire generations.

Image: Rick Obst, CC BY 2.0

Costs are the culprit

Across all respondents, 78% cited inflation as a contributor to their debt, while 68% pointed to housing costs. Both exceeded the 66% who cited their spending habits or borrowing decisions.

To manage their debt, 55% said they reduced spending on eating out, and 42% cut back on personal care or clothing. Another 35% reduced grocery spending, while 19% cut back on emergency savings.

Image: Daniel Carvalho Nier, CC BY 3.0

Older adults feel it too

Gen X respondents reported a different challenge: protecting retirement savings while managing debt.

Among that generation, 41% said debt forced them to reduce retirement savings, the highest share of any generation surveyed.

man and woman sitting on bench facing sea
Image: Matt Bennett, Unsplash

Stages of debt

“What stands out here is that debt hits differently in different life stages,” said Bobbi Rebell, chief financial education adviser at Accredited Debt Relief.

“For a 20-something, that can mean delaying a first home or starting a family. For someone in their 50s, it can mean reworking a retirement plan they previously thought was on track. But the common theme is that debt throws off someone’s expectations for where they’d be at certain life stages in terms of goals and milestones.”

Image: Rep. Josh Harder speaking at retirement home, Public domain

When cutbacks reach essentials

“Cutting back on food delivery or new clothing can be a smart strategy — those are wants,” Rebell said. “But when someone has to cut back on essentials like health care or groceries, or delays repairing a car they need to get to work, that’s a warning sign there’s no room left to maneuver. That’s when a debt relief conversation can help prevent a more urgent financial situation down the road.”

Image: Alice, CC 0

The bigger question

With inflation and housing costs still straining household budgets, how will rising debt shape Gen Z’s long-term financial security and ability to reach certain milestones?

The stats

The survey covered 2,000 U.S. adults with debt. Its findings reflect that group, not all U.S. adults.

  • 45% of Gen Z respondents reported increased debt over the past year.
  • 38% of Gen Z respondents said debt prevented them from saving for or buying a home.
  • 41% of Gen X respondents said debt forced them to reduce retirement savings.

Additional resources

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