Experts suspect that fear during the pandemic may have led to poor spending habits.

“What’s wrong with your generation is…” is a common comment older generations make to younger ones, and Generation Z has given them even more fodder for these remarks. According to a new report by The Wall Street Journal, Generation Z is getting into debt faster than any other generation. From credit cards to student loans, the youngest group of borrowers has their hands full.

Free online financial service Credit Karma has revealed that Generation Z faces a unique set of financial challenges, exacerbated by rising inflation and the ongoing impact of the COVID-19 pandemic.

Generation Z, those born between 1997 and 2012, are part of a society where the cost of living has increased by almost 32% in the last decade. As a result, many people can no longer afford their basic needs such as food and accommodation and turn to credit cards as a last resort.

Accordingly Forbes, Before the pandemic, back in 2018, an independent study estimated that the direct and indirect purchasing power of Generation Z was as high as $143 billion. That’s a financial influence that made brands sit up and take notice. Now, as more of this generation reach adulthood, that number should be rising. But the pandemic has eliminated most of the entry-level jobs this generation would have had, and competition for open positions is fierce.

Mental health experts point out that young Generation Z’s anxiety during the pandemic may have led them to adopt poor spending habits as a coping strategy as they transition from home to college or work.

These elements, combined with rising living costs, have created “a perfect storm of consequences” for Generation Z’s financial security, according to some analysts.