After five years of persistent, elevated inflation, new data shows that so-called “financial nihilism” has taken root among young Americans.
The term reflects the widespread feeling of disenchantment among Gen Zers (born between 1997 and 2012) and millennials (born 1981 to 1996), especially when it comes to checking off key life milestones related to the American Dream.
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When saving for a down payment or retirement feels futile, many young people turn instead to risky strategies involving cryptocurrencies, meme stocks and sports betting to try to get ahead, according to Northwestern Mutual’s annual Planning and Progress study released Monday.
“When people feel behind, they often look for shortcuts," John Roberts, Northwestern Mutual's chief field officer, said in the report. "But building financial security is rarely about cutting corners. It's about consistency, discipline and protection.”
Economic woes fuel financial nihilism
Northwestern Mutual’s study cites inflation and economic uncertainty as tinder for the financial nihilism fire.
The study found that more Americans (45%) expect the economy to worsen this year than those who expect it to improve (36%), and nearly 6 in 10 respondents say they believe inflation will continue to rise in 2026. Overall, inflation is “overwhelmingly” cited as the No. 1 obstacle to achieving financial security, Northwestern Mutual says.
And while these economic issues are felt across generations, they particularly affect younger adults.
For instance, 73% of Americans who feel financially behind say high-risk, speculative investments can help them reach their financial goals more effectively than traditional methods. The younger the respondent, the more likely they are to agree with that mindset: 80% of Gen Z, 75% of millennials, 66% of Gen X (born 1965 to 1980) and 51% of baby boomers (born 1946 to 1964).
Economist Kyla Scanlon — a Gen Zer known for coining the popular economic term “vibecession” — explained in a recent essay for the Wall Street Journal that younger adults are searching for returns that the traditional job or stock market isn’t giving them.
“Young adults aren’t confused or bamboozled by the risks they’re taking. They understand them,” she wrote. “They’re responding to an economy where the usual advice no longer lines up cleanly with outcomes.”
The job market is also particularly tough on younger workers, which can exacerbate the trend. The unemployment rate for young workers between 22 and 27 was nearly 8% as of December, according to the latest data from the New York Federal Reserve. For recent college graduates of the same age, the unemployment rate was 5.6%.
Given that most Americans’ exposure to the stock market comes from retirement accounts through the workplace, a high youth unemployment rate acts to bar them from the markets — and push them into riskier investments.
Last year, an investing study from YouGov found that Gen Zers are four times more likely to own crypto than a retirement account. For Dinon Hughes, a Gen Z financial planner, it makes sense. He previously told Money that he sees these trends playing out among his clients and peers alike.
“With that foundation, which do you think a 20-something person is more likely to do on their own,” he said — open an individual retirement account or “make a couple quick bucks off crypto?”
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