How to Combat Financial Difficulties in 2023: 4 Financial Tips for Young Adults

Nov 20, 2023

Combat Financial DifficultiesIn 2021, about 68% of 25-year-olds were living away from their parents' homes, compared with 84% in 1980, according to Pew Research Center. This isn't because they want to, but because the financial situation for a number of young adults has forced them to.

Gen Z is grappling with soaring housing and other cost of living expenses, large amounts of student loan debt, and wages that are not keeping up with these expenses. In 2023 the average student loan borrower has $28,950 of student loan debt, compared to $9,320 in 1993. The median home price in 1993 was $126,500, and in 2023 it is $430,300. Meanwhile the average salary in 2023 is $59,428, compared to $23,133 in 1993. So, in the last 30 years, the average student loan debt has increased by 211% per borrower, home prices have increased by 240%, but the average income for individuals has only increased by 157%. These numbers help illustrate why it is difficult for today's young adults to afford the same lifestyle as their parents.

While there is only so much that can be done by individuals to overcome current economic conditions, there are things today's young adults can focus on to improve their financial situation.


Building a budget is the cornerstone of effective money management. Gen Z should calculate their monthly income and expenses, which may include rent, utilities, groceries, and discretionary spending. A well-structured budget enables them to track their expenditures and identify areas where they can save or invest.

Save /Invest

Gen Z should lean into something that they have plenty of: time for savings to grow. Time is an asset when it comes to saving for the future; young adults should prioritize building an emergency fund and saving for short-term goals, such as travel or a down payment on a home. Automating deposits to a dedicated savings account can make consistent saving hassle-free.

Many Gen Zers are working in the gig economy, which often lacks job stability, benefits, and retirement plans. This can make it difficult to plan for the long term and save for retirement. As early as possible, you should recognize the power of compound interest and begin investing. While retirement may seem distant, contributing to a retirement account early can substantially bolster the final balance.

Build Credit

Establishing credit is key for future financial endeavors. A simple way to boost your score is by spending with credit cards. However, Gen Z should exercise caution with credit cards. They should double-check interest rates, fees, and the impacts of late payments on their credit scores. Using credit responsibly, paying bills in full and on time, and keeping credit utilization low can foster a positive credit history.

Setting tangible financial goals provides Gen Z with motivation and direction. Whether they are saving for a vacation, aiming to purchase a home, or striving to pay off student loans, having specific objectives helps allocate resources effectively.

Ask for Help

When facing complex financial decisions or uncertainties, Gen Zers should not hesitate to seek advice from financial professionals. Their financial institutions, like PFCU, frequently offer financial counseling services that provide personalized guidance, helping them make informed choices. PFCU provides valuable online educational resources and webinars to help empower members with the knowledge they need to succeed financially.

Although the data indicates that it is more challenging financially for today's young adults than it has been for past generations, implementing these tips can improve their financial outlook.


Erin Ellis
Accredited Financial Counselor ®
Philadelphia Federal Credit Union
National Association of Federal Credit Unions 
PFCU is a proud member of the National Association of Federal Credit Unions
National Credit Union Administration 
Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.
Equal Housing Lender 
We do Business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

We provide links to external websites for your convenience. Philadelphia Federal Credit Union does not endorse and is not responsible for their content, links, privacy or securities policies.

Please note that the amount of money contained in your investment accounts are considered non-deposit products and therefore, are not NCUA insured, not credit union guaranteed, may lose value, are not guaranteed by any government agency. Securities, Financial Planning and Insurance products are offered through LPL Financial, and its affiliates, Member FINRA, SIPC. LPL Financial and Philadelphia Federal Credit Union are independent entities.