Around 85% of Gen Zers worry they can’t afford one month’s expenses if they lose their job

Young businessman holding his head and pondering
Though Gen Z workers do prioritize saving part of their paycheck, they have also had the least amount of time to build up their emergency fund of any generation.
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As layoffs continue to roll through the tech sector, workers across the U.S. are growing increasingly nervous about losing their jobs and how that would impact their finances. And perhaps none are more worried than Gen Z, a recent survey finds.

In fact, 85% of Gen Z survey respondents said they are concerned about paying for a single month’s worth of living expenses if they lost their primary source of income, personal finance site Bankrate finds. That’s the most of any age group: 79% of millennials report the same feeling, as do 69% of Gen Xers, and 53% of baby boomers.

Though Gen Z workers do prioritize saving part of their paycheck, they’ve also had the least amount of time to build up their emergency fund of any generation.

With inflation and months of news-making layoffs, it’s no wonder young workers are stressed. Financial anxiety has been increasing among all workers. The majority of workers are experiencing “negative effects” as a result of the current economic environment, according to Franklin Templeton’s Voice of the American Worker Study. For nearly a third of workers, financial anxiety has gotten so bad that it’s affecting their sleep, and 73% say it’s changed how they envision their retirement.

A recent report from Edward Jones found almost two in five Americans don’t have enough stashed away in an emergency funds to last them a month, and 29% have less than $500 saved.

“A sudden interruption of your income can cause major stress that you can avoid, or minimize, by having a plan in place,” says Stuart Boxenbaum, a certified financial planner and president of Florida-based Statewide Financial Group. “Having an emergency fund built up can help Gen Zers relax if they go through the unfortunate event of a job loss.”

Give every dollar a job

Workers face a number of barriers that preclude them from building up an emergency fund that could help reduce their financial anxiety. There’s ever-growing cost of living, student loan debt, low wages, and more for Gen Z, in particular, to contend with. Many graduated into the turbulent job market of the coronavirus recession, and others are seeing the supposedly stable tech jobs they banked on disappear.

But one strategy that might help young workers save more is to give every dollar a job, says Jennifer Huisking, vice president at Goldman Sachs Personal Financial Management.

Similar to zero-sum budgeting, this technique involves allocating every single dollar of your income to an assigned need (savings, rent, groceries, etc.). It’s like a regular budget but super-charged. It can help stop you from over-consuming—when there’s excess money, many people’s inclination is to spend it—and ensure you’re hitting your goals, like increasing your emergency fund.

“It can take time to set up your budget using this approach, but it can pay off in the long run,” says Huisking. “When you know exactly where your money is going, saving takes as much of an active role as your spending.”

To assign every dollar a job, work backward. Consider you monthly fixed expenses, and subtract them from your income. Then assign the rest of your income to your discretionary purchases. Your budget should “zero out” your income, says Huisking. Every dollar has something to do.

“It’s a good idea to include some cushion in your expense allocation should any unexpected events come up, as they tend to,” she says.

Adopting this habit early on can help you spend and save your money with intention.

“Savings are a source for future spending, so it can be very empowering to accumulate future freedoms you might desire over time, too,” says Huisking.

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