Dear GenZ, Maximalism Won’t Save Your Mental Health But It Will Kill Your Retirement Goals

It’s possible that two trends may be colliding to create this precarious financial position for GenZ: maximalism and fragility. As to maximalism, GenZ’s design esthetic, whether interior or sartorially, is bold.

Years ago, we urged advisors to consider how the minimalism adopted by Millennials might influence their investing behavior. “The tiny house “movement” combines two other cultural zeitgeists – minimalism and the new frugality. Both trends impact directly on the funds available for savings and retirement. In fact, both trends are partially motivated by a want to ensure a stable financial picture and one that includes a healthy retirement.”[1] Getting inside the mindset of minimalist millennials seemed like the key to bringing financial advisory services to that generation. Even more so since millennials favored algorithms over advice.

As with all cultural trends, there was bound to be a backlash at some point. That might explain why GenZ, the generation born between 1997 and 2013[2] has dropped minimalism like it’s hot. In fact, The youngest members of GenZ, who are now 10, were toddlers at the time we published the article on tiny houses and retirement savings. The oldest of GenZ, who are now 26, should be at an age and career status where they can focus on beginning retirement savings.

According to a new study from Credit Karma, a consumer spending website, “The average credit balance among members during the period of October to December 2022 was $6,469, compared to $6,242 in March to May 2022. That represents a 3.64% increase in average credit card debt. The average next payment was $181.”[3] Given inflation and a shaky job market, this increase in consumer credit card debt may be lower than financial advisors predicted. However, when it comes to GenZ, there is bad news on the horizon.

As a generation, they are increasing their credit card debt faster than any others. Consider that half of the generation is yet to attain the age of 18, meaning, they most likely don’t have a credit card yet. Overall, GenZ has an average total debt of $16,283. This is a fraction of their parent’s generation (GenX’s total debt is $61,036), but it since it “includes credit card, mortgage, student loan, medical loan, auto lease and auto loan debt” advisors should be very worried for this generation. Given their age, more than 1/3 of all GenZ can barely drive, let alone own or lease a car and obviously wouldn’t have a mortgage. Unsurprisingly, GenZ has an increasing number of past due accounts, as a generation. For the final quarter of 2022, as reported by Credit Karma, GenZ’s past due accounts increased by 1.77%, whereas the other generations all decreased: millennials by 1.39%, GenX by 2.87%, Boomers by 3.37%.

It’s possible that two trends may be colliding to create this precarious financial position for GenZ: maximalism and fragility. As to maximalism, GenZ’s design esthetic, whether interior or sartorially, is bold. “They're bringing in a culture shift with organic shapes, colorful elements, and clashing patterns dominating art, media, fashion, and interior design. The trend is pushing away once-reigning minimalism… Its features mark the resurrection of a recurring trend - maximalism. As the name suggests, maximalism is all about maximizing everything from shades and textures to materials and forms.” Whereas minimalism favorited organic textures (wood, ceramics) and having small, edited spaces that reflected secure identities and centered around interpersonal relationships, maximalism is about everything in the same place at the same time.[4] In a word, maximalism is expensive. Some design experts point to saturated social media and a need to escape a feeling of AI algorithm generated experiences to explain GenZ’s focus on maximalism. There may be another reason: GenZ’s mental health.

GenZ’s love of maximalism may flow from their poor mental health. And that mental health may also explain GenZ’s credit card crisis. At this point, generational debates about fragility are tired. The overused millennial/boomer fracas alleges that millennials are too quick to be injured and find insult in social exchanges with clumsy boomers, with nuances to the debate resting on which generation is explaining their side. GenZ’s fragility is borne of entirely different stuff. One educator noted that her college students stated that they  “were born right after 9/11—into a world of fear, uncertainty, cultural and religious bigotry, us-vs.-them mentality, and potential world war.”[5] Another social psychologist argued that GenZ “set up for failure due to a confluence of social media, bad parenting, and a political ideology that emphasizes victimhood.” He went on to note that GenZ has “extraordinarily high rates of anxiety, depression, self-harm, suicide and fragility….”[6] Social science supports the overall finding that GenZ is more anxious or depressed (or both) than any other generation. And that weighs negatively on their finances.

Mental health struggles are strongly correlated behavioral finance decisions. Depression can impact motivation to manage everyday aspects of life, including finances and managing debt. Spending may bring a brief sense of feeling good, which can be abused by those with low mood. Those with anxiety may avoid situations that increase their feelings of panic, like budgeting or reviewing bills. Additionally, the presence of debt can increase anxiety, depending on the kind of debt. “[U]nsecured debt, such as debt from credit cards or medical bills, generally is much more likely to be associated with anxiety than secured debt, like mortgages — which are often not thought of as debts at all, but rather investments.”[7] All of this leads to a real crisis for GenZ that is currently showing up in rising past due accounts and credit card balances. Financial advisors may want to consider options for providing education to this generation in a way that makes information about budgeting and balancing savings needs accessible.


[2] Pew Research uses this time period for GenZ. Other research agencies use slightly different time periods, with some ending in 2012 and others beginning earlier.






These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.

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