The Foreclosure of Futurity: How Generation Z's Economic Disillusionment Has Shattered the American Dream and Spawned a New Financial Nihilism

Introduction

Generation Z's Economic Rebellion: A Simple Guide to Understanding "Disillusionomics

Generation Z faces an economic crisis unlike anything their parents experienced. Young adults in their twenties and early thirties are carrying an average of $94,101 in debt—nearly double what millennials owed at the same age.

They're struggling to find jobs, unable to afford homes, and watching their paycheques disappear into ever-rising costs for housing, food, and basic necessities. This has led economist Alice Lassman to coin a new term: "disillusionomics." It's not just about bad financial decisions; it's about an entire generation's rational response to an economy that has fundamentally broken its promises to them.

What Is Disillusionomics, Anyway?

The term "disillusionomics" describes how Generation Z has abandoned the traditional financial advice their parents followed. Their grandparents saved money, bought homes in their twenties, and trusted that hard work and patience would lead to secure careers and comfortable retirements.

Gen Z watched that playbook fail spectacularly. They saw the 2008 financial crisis destroy their families' savings and homes. They came of age during a pandemic that proved job security was a myth. They entered the job market facing the worst competition in generations, with entry-level positions nearly impossible to find.

So instead of following the old rules, Gen Z has created new ones. Some members of this generation spend recklessly on experiences like concerts and travel—they call it "doom spending" or living by the philosophy of "YOLO" (You Only Live Once). Others have adopted extreme value-consciousness, buying cheaper alternatives to luxury brands and refusing to pay premium prices for anything.

Many have turned to unusual financial tools like buy-now-pay-later services, which let them split purchases into small weekly payments instead of paying upfront. And a surprising number have started multiple side hustles, treating income diversification as essential to survival rather than optional ambition.

This might sound contradictory. How can Gen Z be simultaneously the worst spenders and the most value-conscious? The answer is that both behaviours make perfect sense when you believe the future is economically unattainable.

Why This Generation Is So Angry About Money

To understand disillusionomics, you need to understand what Gen Z believes about their future. The oldest members of this generation were still in primary school during the 2008 financial crisis. They watched their parents lose jobs, their neighbours lose homes to foreclosure, and their grandparents' retirement savings vanish. They learned, very early, that the economic system was fragile and that the people in charge couldn't be trusted.

Then came the COVID-19 pandemic, which proved that economic conditions could change overnight without warning. Job offers were rescinded via email. Stable careers evaporated. Nothing that had seemed permanent was actually permanent at all. And when the pandemic ended, the real problems began.

Housing became impossibly expensive. Median home prices reached $440,000 while typical household incomes hovered around $75,000. A Gen Zer would need to make approximately $141,000 annually just to afford a median-priced home—double the average household income. The median age of first-time homebuyers climbed to 40 years old. One-third of Gen Z have simply given up, telling surveyors they don't believe they'll ever own a home.

Jobs became more precarious, not more stable. Entry-level positions disappeared. The unemployment rate for people aged 16 to 24 reached 10.8 percent, more than double the national average. Young people who managed to get jobs couldn't rely on them—roughly one in five experienced job loss in 2025 alone. And wages didn't keep pace with the rising cost of living. After accounting for inflation, salaries for young workers have stagnated while everything else has become dramatically more expensive.

Student loans, often taken out at the suggestion of parents and educators, haven't translated into reliable career pathways. Healthcare costs are astronomical. Rent is unaffordable in nearly every American city. A single unforeseen expense—a car repair, a medical emergency—can trigger a cascade of debt and financial ruin.

How Gen Z Is Actually Responding

Given these circumstances, Gen Z's financial behaviour becomes understandable, even rational. If you believe the future is foreclosed—that you won't be able to buy a home, that you might lose your job, that the economy will never provide for you—then the logic of traditional financial advice collapses. Why save for a down payment when home prices are rising faster than you could ever save? Why deny yourself experiences and pleasures now when securing them later seems impossible?

This is the psychology behind "doom spending." For Gen Z, concert tickets and travel aren't frivolous luxuries—they're rational responses to a life perceived as having a foreshortened horizon of stability. If you're going to be miserable, you might as well have something enjoyable to remember. It's a form of self-medication, a way of saying that if the future won't provide security, the present might as well provide happiness.

But Gen Z isn't completely reckless. Simultaneously, they've developed extraordinary value-consciousness. They'll spend $200 on a concert ticket they cannot afford but refuse to pay full price for a pair of jeans when a cheaper, similar-quality version exists.

They've abandoned luxury brands entirely, embracing what they call "dupe culture"—buying the generic or budget version of everything. They use buy-now-pay-later services like Klarna and Afterpay, which let them purchase items in small instalments. Rather than applying for a single credit card with a high limit, they manage multiple smaller payment plans.

This behaviour might appear contradictory to older generations, but it reflects genuine economic sophistication. Gen Z has essentially decided that the promise of luxury brands and status symbols isn't worth the premium prices.

They're willing to admit that a $15 dress from a fast-fashion retailer will perform the same function as a $150 designer piece. They understand that the value of most consumer goods is purely symbolic, and they've rejected the symbolic premium.

Perhaps most significantly, Gen Z has embraced the concept of multiple income streams as a basic survival strategy. Approximately 72 percent of Gen Z are pursuing side hustles—freelance writing, social media content creation, reselling items online, tutoring, coding, graphic design—anything that generates money.

They don't view this as entrepreneurial ambition. They view it as essential insurance against the unreliability of full-time employment. If any single source of income can evaporate without warning, then multiple sources provide some measure of protection.

The House Hacking Strategy and Other Creative Adaptations

Faced with the near-impossibility of traditional homeownership, Gen Z has developed alternative strategies. One increasingly popular approach is "house hacking," which involves purchasing a property with multiple dwelling units or an accessory dwelling unit, living in one portion, and renting out the others to offset the mortgage. Platforms like Airbnb have made this accessible—someone can buy a house or duplex, live in one unit, and rent the others as short-term vacation rentals, using the income to cover the entire mortgage.

Others are moving to more affordable geographic areas, abandoning expensive coastal cities for smaller towns and secondary markets where housing is more reasonably priced. Some are co-buying properties with friends or siblings, pooling resources to achieve down payments that would be impossible individually. A smaller number are moving back in with their parents to save aggressively for several years, prioritising homeownership above independence once their early twenties have passed.

These adaptations might seem unconventional compared to prior generational patterns, but they demonstrate genuine creativity and determination. Gen Z hasn't simply surrendered to unaffordability; they've redefined what homeownership can mean. Instead of waiting for the idealised single-family suburban home, they're buying duplexes, renovating fixer-uppers, and embracing multifamily properties that provide immediate income to offset costs.

The Mental Health Toll and Deferred Adulthood

The psychological weight of chronic financial precarity is severe. Approximately 52 percent of Gen Z report that financial anxiety substantially damages their mental health. Financial concerns are the primary source of stress for 30 percent of this generation, exceeding worries about relationships, career satisfaction, or health. The rates of anxiety disorders, depression, and substance-use disorders are markedly higher among Gen Z than among preceding generations.

The consequence is a deferral of major life milestones. An astonishing 84 percent of Gen Z report delaying significant decisions—buying homes, starting families, committing to geographic locations, pursuing educational opportunities—in hopes of achieving financial stability that continually recedes. The median age at which people have their first child has risen substantially. Birth rates have fallen. Household formation among younger cohorts has stagnated. These aren't simply individual choices; they're aggregate demographic consequences of economic despair.

This creates a generational tragedy: people in their prime childbearing years are postponing parenthood. People who should be establishing households and contributing to local community stability are instead moving constantly in search of slightly cheaper rent. People who might want to start businesses or pursue creative endeavours are forced instead into whatever paid work they can find, because they cannot afford to take risks.

The Debt Crisis and Buy-Now-Pay-Later Trap

The average Gen Zer carries $94,101 in debt. This includes credit card balances (now averaging $2,834 for those aged 22 to 24), auto loans, personal loans, and increasingly, BNPL arrangements. More troublingly, approximately 10 percent of Gen Z have fallen 60 or more days behind on payments, compared to lower delinquency rates among millennials at the same age.

Buy-now-pay-later services represent a particular concern. These services allow customers to split purchases into four or more interest-free instalments. A $200 purchase becomes four $50 payments spread over two months. To someone struggling financially, this seems reasonable—it spreads the pain across multiple paycheques. But it also enables impulse buying. When customers only have to pay $50 today, they're far more likely to make the purchase than if they needed $200 upfront. Studies show that shoppers spend approximately 20 percent more when BNPL options are available.

Additionally, Gen Z consumers often use multiple BNPL services simultaneously. Someone might have four different active payment plans with four different providers, each requiring weekly or biweekly payments. If even one paycheque is delayed due to a scheduling issue at work, the entire system collapses. Late fees accumulate. Interest charges kick in. What seemed like a manageable strategy becomes a debt spiral.

The psychological draw of BNPL is powerful, however. For a generation acustomed to digital immediacy and accustomed to deferring costs, it feels natural. And for people living paycheque to paycheque, it genuinely does make purchases possible that would otherwise be completely unattainable. The trap, however, is that it can mask genuine unaffordability, allowing people to convince themselves they can afford things they actually cannot.

Conclusion

What Needs to Change

The disillusionomics that Gen Z has adopted aren't problems that can be solved through individual financial education or behavioural change. Gen Z isn't financially illiterate—they're financially rational, adapting to genuine economic constraints. What needs to change is the economic system itself.

Housing policy must shift dramatically. Zoning laws that artificially restrict housing supply need relaxation. Regulations that inflate construction costs need elimination. Policies that monetise existing homeowners' property values at the expense of young first-time buyers need reversal. Without substantial expansion of housing supply, no amount of down payment assistance will resolve affordability.

Labour markets need stabilisation. Employers need to create genuine entry-level positions and career pathways rather than contracting out work to freelancers or temporary workers. Wage growth needs to exceed inflation. Benefits need expansion. Job security needs restoration. Until young workers can reliably expect stable employment with wages that cover basic expenses, financial stress will remain their dominant reality.

Financial regulation needs tightening around BNPL and consumer credit more broadly. The proliferation of uncoordinated lending platforms creates systemic risk. Meaningful safeguards—debt ceiling mechanisms, mandatory credit reporting, transparency requirements, late-fee caps—could substantially mitigate harm while preserving the legitimate flexibility that these services provide.

Most fundamentally, there needs to be explicit recognition that Gen Z's disillusionomics reflects not generational failure but systemic failure.

The promises that built earlier generations' trust in institutions—promises of stable employment, affordable housing, and generational advancement—have been broken. The consequences are becoming visible in elevated mental health crises, deferred household formation, and declining birth rates.

The next question is whether political and economic leadership will address the underlying systemic failures or whether they will continue to blame individuals for rational responses to irrational circumstances.