Rising Costs Reshape Financial Behavior Across Generations
As inflation and economic pressures continue to mount, young adults in the U.S. are increasingly turning to friends and family for financial support. According to new research from PYMNTS Intelligence, one-third of Gen Z and zillennial consumers have borrowed money informally to cope with the escalating cost of living.
The December 2025 PYMNTS Data Book, titled “Rising Costs and Financial Pressures Push Consumers to Adapt,” surveyed 2,368 U.S. adults and found that financial stress is a common thread across age groups. However, the strategies people use to adapt vary widely depending on their generation.
Daily Expenses and Healthcare Lead Financial Concerns
Half of U.S. consumers report that everyday living expenses are their top financial challenge. This includes essentials like rent, groceries, and utilities. Medical costs are also becoming more burdensome, with nearly two-thirds of respondents citing healthcare as a significant financial strain.
While these concerns are widespread, the report shows that younger and older Americans are responding in distinct ways. Older generations, such as baby boomers and seniors, tend to manage their finances by cutting discretionary spending. In contrast, younger adults are more likely to look for alternative income sources or seek financial help from their social networks.
Healthcare Costs Weigh Heavily on Younger Adults
Healthcare expenses have surged to the forefront of financial stress, especially for Gen Z consumers. Over 80% of Gen Z respondents said healthcare costs place at least a moderate burden on their household budgets. This is nearly double the rate of baby boomers who feel similarly affected.
Younger people often lack robust insurance coverage and substantial savings, making it harder to absorb unexpected medical bills. As a result, healthcare expenses are competing directly with other necessities like food and housing, leading to tough choices and potential long-term consequences.
Informal Borrowing Becomes a Lifeline
Approximately 33% of Gen Z and zillennial consumers report borrowing money from friends or family to manage rising costs. This trend highlights a growing reliance on informal financial support, especially among younger adults who may lack access to traditional credit products.
In contrast, older adults are more likely to reduce spending to deal with financial pressures. About 70% of baby boomers and seniors report cutting back, compared to only half of Gen Z. This divergence underscores generational differences in financial resilience and access to resources.
Healthcare Delays and Cost-Cutting Tradeoffs
The research also reveals alarming trends in healthcare behavior. Nearly one in five respondents delayed a doctor visit in the past three months due to cost concerns. Others skipped medical tests or reduced their medication intake to save money.
These decisions are most common among younger adults and could lead to higher medical and financial costs over time. Short-term savings often result in long-term health consequences, emphasizing the need for more accessible and affordable healthcare solutions.
Effectiveness of Coping Strategies Varies
Despite the challenges, nearly half of millennials and zillennials believe their strategies for managing rising costs are effective. This optimism isn’t shared by all. Consumers living paycheck to paycheck are less likely to feel confident about their financial decisions.
This divide suggests that access to digital tools and flexible financial products may be helping some households adapt more successfully than others. Financial institutions and FinTech firms may need to tailor their services to address these disparities.
Technology as a Financial Equalizer
Younger generations are showing strong interest in tech-driven financial tools, such as real-time insurance benefit checks and AI-powered healthcare cost estimators. These technologies offer transparency and predictability, empowering consumers to plan and budget more effectively.
Older adults, however, tend to show less enthusiasm for these innovations, often choosing not to engage with them. For insurers, healthcare providers, and financial service companies, this signals a clear need for generationally targeted solutions.
Conclusion: A Shared Struggle, Diverging Paths
Financial stress is a universal experience in today’s economy, but the ways people respond to it are far from uniform. Young adults are increasingly relying on their social circles for support, while older generations lean on more conservative financial habits. As costs continue to rise, businesses and policymakers must consider these generational differences to create more inclusive and effective financial solutions.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.