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From tapping into Buy Now Pay Later, to spending all their money just getting from point A to point B, Generation Z is at the sharp end of the rising cost-of-living crisis and the question they face to cope: should I rely on my parents’ help instead?
Households generally face soaring prices, as inflation hit 5.4% in January, with pricier food and clothes, followed by energy tariffs and tax bills going up.
For those on starting salaries, the situation can look even more bleak, as most say they can’t afford a house unless they get help from the Bank of Mum and Dad.
The newest set of young adults, nicknamed Gen-Z, is finally facing the harsh reality that millennials spent many years figuring out: salaries are low, housing is unaffordable and leaving the front door is fraught with costs.
How do they deal with this emerging cost-of-living crisis?
Mouthy Money spoke to three Gen-Zers on how the current economic situation is affecting their lives.
“The cost-of-living crisis is a real worry”
Paris Williams pays £800 rent a month for a room in Zone Four of London. Recently she’s been told her rent will be going up by £70, but her wages aren’t rising to keep up – in fact, she has lost her job.
“I’ve just been made redundant. I work in the charity sector, which is funded by donations. There’s just not the money to keep my job. So, I’m currently job hunting and doing interviews. I think it’s a really risky time to be job hunting.”
“National insurance is going up. Everything else is going up and we’re earning less. I think it’s quite worrying to be a young person in this financial crisis. We can’t really jump up because everyone wants years of experience to give you a job.
“Either way, I’m still going to have the same amount of money left over, but my wage isn’t going up. That’s it, I’m out of my pocket.”
Paris regularly uses Buy Now Pay Later schemes for her shopping. She says: “My mum calls me Klarna Queen. It really says something about the cost of living if people are having to use Klarna and Clearpay to pay for food.
“We shouldn’t be dependent on Buy Now Pay Later, but here we are. I should have enough money in the bank to not use this scheme.”
Paris is also a student at Goldsmiths, University of London, and says the impact of not having a job and studying in London is: “Quite scary, and it’s caused a lot of stress over the last few weeks. Definitely a lot of sleepless nights.”
“All my money goes into fueling my car”
Freya Barrett earns around £1,000 a month, by being part of the Kickstart Scheme. She is currently working as a digital marketing, content and design manager for a nursery.
The Kickstart Scheme provides funding to employers from the Government to find jobs for those between 16-24 on Universal Credit.
Freya’s salary is minimum wage, and she does 25 hours of work per week for a total of six months as part of the scheme.
She says: “The fact that we even have a Kickstart Scheme should say a lot, because it shows employment is such an issue. I earn more because I live in London, but if you live outside of London, you’ve got even a bigger problem.
“I live with my parents still. I can’t move out. I have a really tiny run-around car that only I only drive infrequently. It’s £50 for me to fill up my car every three weeks. Running a car is expensive, but that is crazy.
“Even just in London, getting around is so expensive. Anything food-wise, travel-wise is always super, super expensive. And it just adds up.”
Freya says she finds saving and budgeting a lot easier since she’s an introvert, and only goes out at the weekend.
“As a more introverted person, I can get away with quite a lot,” she says. “Even though I don’t have much personal income, I’m pretty comfortable in my life because I do have the safety net of my parents.
“My parents have helped me loads, I can’t knock that. Without them, I would not have been able to afford my car, let alone if my parents didn’t live in London. Without them I couldn’t afford to live here in order to have a job.”
“I can’t afford to move out of my parents’ house”
Helena* is part of an internship scheme in London but is still living with her parents in Cambridge.
She says: “The cost of living is so high in London, that I can’t afford to move out of my house.
“On top of that, once you’re in London, the cost of socialising or even just getting the Tube adds up very quickly. It’s simply unaffordable for someone on a starting salary. Small costs don’t seem a lot, but they add up very quickly.
“Because the rent is so high relative to my wage, it makes a substantial difference. I have a lot of friends who are in the same position.
“And similarly, I have a lot of friends who’ve moved out and are renting. But they are then so limited to what they can do once they’re in London, because all their money is going on rent and bills. I’d say most people my age are living at home.”
Helena decided to commute to London for work and finds train tickets to be “extortionate.”
She adds: “All my friends from University have moved to London, everyone’s migrated there. I have to go to London to socialise, and everybody lives so far around the city.
“You tend to meet over coffee, for example. That means you have the cost of travelling for the coffee and then the cost of the coffee. But it’s your social life support.
“I think in terms of finances, for someone our age, it’s fairly bleak. Like the cost of buying is outrageously high relative to salaries, and one of the only ways really you can buy a property is if you’ve got financial help from your parents, or you’re buying it with a partner.”
*Pseudonym. Helena requested we protect her identity so she could freely share her experience about the cost-of-living crisis.
Dana is a former reporter at Mouthy Money, having previously worked for Times Money Mentor and the BBC.