TransUnion data shows Gen Z holding 12% more debt than year prior

Young adults in Davidson County face a higher financial burden at their current age than previous generations did at the same stage of life. According to inflation-adjusted data from TransUnion, Gen Z individuals carry more total debt than Millennials held during their equivalent early career years.

Ted Rossman, a credit counseling expert at the nonprofit Money Management International, said the agency witnessed a 35% increase in demand from Gen Z clients over the past year. The average debt load for these new clients is approximately 12% higher than it was a year earlier. Rossman identified student loans, elevated rent prices, and buy now, pay later financing as the primary factors contributing to the rise.

Many young adults are now living paycheck to paycheck with minimal savings. Rossman noted that the high costs of forming a household make these early career years particularly expensive. "You have student loans, you have high housing costs," Rossman said. "Those household formation years are very expensive, so GenZer’s actually have more debt than Millennials did at the same age, even adjusted for inflation according to TransUnion."

Rossman advised clients to focus on basic budgeting and to monitor buy now, pay later spending closely. While these plans are popular among people in their 20s, they still constitute debt. "It can work in your favor," Rossman said. "Sometimes you can get a good deal, but just be mindful that it’s not a free lunch."

Credit card interest rates often range near 20%, adding to the cost of unpaid balances. Rossman cautioned that even short-term interest-free payment plans require consistent payments and can lead to overspending if not managed carefully. Individuals who feel overwhelmed by their obligations are encouraged to seek assistance from credit counseling services.