Gen Z has been labeled many things: digital natives, TikTok champions, the anxious generation. But perhaps no connotation has stuck quite like financially anxious. Headlines regularly paint this cohort as stressed about money, risk-averse, and paralyzed by economic uncertainty. As someone who’s spent nearly a decade building a new generation of financial products, I think we’re missing the real story.
Yes, Gen Z exhibits financial anxiety—but not in the way most people think. Instead of assuming that they don’t understand money, perhaps we should question if they understand it more deeply.
The Anxiety Behind the “Ick”
This isn’t financial anxiety—it’s financial intelligence.
Gen Z didn’t grow up with the luxury of financial naivety that many before them enjoyed. They came of age during the 2008 financial crisis, watched their parents struggle with student loan debt, and entered adulthood during a global pandemic that upended economic stability. They’ve seen what happens when loved ones overextend themselves financially, and they’re determined to work hard not to repeat those mistakes.
When a 22-year-old tells me they don’t use credit cards, they’re not expressing irrational fear—they’re making a calculated decision based on observed outcomes. They’ve watched credit card debt destroy relationships, delay major life milestones, and create decades of financial stress. In fact today, with annual credit card percentage rates just over 20%, if someone made minimum payments toward the average credit card balance ($6,371), it would take them more than 18 years to pay off the debt and cost $9,259 in interest over that time period. Their anxiety is actually sophisticated risk assessment.
Redefining Financial Responsibility
What older generations may interpret as financial anxiety, I see as financial intelligence. Gen Z has fundamentally redefined what responsible spending looks like. Where previous generations saw credit cards as a rite of passage and a tool for building credit history, Gen Z sees them as a trap.
This generation researches products extensively, compares options obsessively, and thinks carefully about the long-term implications of their spending decisions. They’re not afraid to spend money—it’s just that many of them are afraid to spend money irresponsibly.
Consider how they engage with alternative payments such as buy now, pay later platforms like Afterpay. 98% of purchases incur no late fees and 96% of installments are paid on time. These consumers aren’t looking to borrow money they don’t have—they’re looking to optimize cash flow management. They want to align their spending with their pay cycles without paying interest or hidden fees. It’s budgeting made practical, with built-in guardrails that prevent overspending compared to other options like credit cards and payday loans. If someone misses a payment, a customer’s account is paused and they’re unable to make another purchase using a lending product until the account is brought current, ensuring responsible credit management across our ecosystem.
The Innovation of Conscious Spending
Gen Z’s approach to money has created an entirely new category of financial products. Traditional credit assumes that debt is inevitable and profits from that assumption. But what if we built financial tools that helped people avoid debt in the first place?
This is the philosophy behind what I like to think of as conscious spending—a middle ground between the limitations of debit cards and the risks of credit cards. It provides flexibility without the cycling debt trap, transparency, and alignment between consumer and provider interests. We win, when the customer wins.
The financial services industry has been slow to recognize this shift, often dismissing Gen Z’s preferences as temporary or immature. But the data suggests otherwise. In fact, Gen Z is expected to become the largest and wealthiest generation in history, amassing $36 trillion in income in the next five years, with expectations for that to double by 2040. This generation’s spending patterns aren’t a phase they’ll grow out of—they’re the foundation of a new financial paradigm that’ll impact future generations to come.
Thoughtfulness as a Strength, Not a Weakness
Perhaps Gen Z’s financial anxiety, or thoughtfulness, isn’t something that needs to be cured—perhaps it’s exactly what the financial system needs. Their skepticism of traditional credit products is forcing innovation and alternative payment methods. Their demand for transparency is eliminating predatory practices. Their preference for aligned incentives is creating better business models.
When I started Afterpay with Anthony Eisen in 2014, we were trying to build a product that respected how younger consumers wanted to spend. We recognized that millennials and Gen Z wanted financial tools that worked with them, not against them.
The result has been a fundamental shift in how payment companies around the world think about success. Instead of maximizing debt and interest income, we succeed when customers successfully complete their payment plans. Instead of profiting from financial mistakes, we all win from financial success.
The Future Is Financially Conscious
The question isn’t whether Gen Z is financially anxious—it’s whether the rest of us are financially conscious enough to keep up. This generation is building the foundation for a healthier relationship with money, and the companies that will thrive in the next decade are those that understand this shift. The financially anxious generation might just be the generation that finally gets money right.
