Buy Now, Pay Later: The New Debt Trap for Gen Z

Generation Z, or Gen Z for short, is defined as those who were born after 1997. Research by Harris Interactive estimates that America’s youth, Generation Z, is running a $1.5 billion budget deficit in today’s economy. Harris Interactive breaks down Generation Z’s spending habits into three categories:

 Ages 7 – 12 years old spend $19.1 billion per year, of which 87% is funded by parents

Ages 13 – 19 years old spend $94.7 billion per year, of which 37% is funded by parents. 

Ages 20 – 21 spend $61.3 billion per year, of which 7% is funded by parents. 

This simply means that Gen Z have become the largest generation of consumers in just a few short years. 

How do marketers influence Generation Z’s spending habits?

According to marketing experts, the majority of Gen Z’s buying power is invested in those that enrich America’s youth, such as hobbies and entertainment.  Harris Interactive conducts a survey that shows marketers are targeting American Youth before they’re truly capable of understanding the reality of “Buy Now, Pay Later” culture. In line with the current economic situation, parents face an even larger financial deficit due to a combination of tax cuts and spending habits. 

 How can parents help Gen Z manage their finances better? 

 Practice money management with your child and show them how important it is to keep track of a personal budget. This helps children understand the value of money and the consequences of spending, as well as the importance of introducing allowances. Do not give them everything they ask for even if it is only a few dollars or two.

 You, as a parent, lead the example to your children by role-modeling good financial habits. Overspending on your budget will encourage your children to do the same. Take a moment today to review your monthly bills, especially if you are in the midst of a financial crisis. If you have a credit card payment that you spend more than 5% of your monthly income on, or if you only pay the minimum payment, then you should consult with a non-profit credit counselor at CreditGUARD of America for help with your finances.  

At its most fundamental, we should take the time to educate our children about the value of financial literacy and the need for financial responsibility in their lives. Make sure you do not lead as an example to Gen Z’s budget deficit with your overspending habits. 

For helpful financial tips and non-profit counseling, call us at 800-282-8497 toll-free or visit CreditGUARD of America’s website at


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