Cash-Strapped Gen Z Faces Tough Holidays

Some of Gen Z, anyway.

In a telling report from Qualtrics on behalf of Credit Karma, nearly 24% of Americans wish the holidays were canceled this year due to cost alone. For Gen Z and millennials, 28% say student loan repayments will make the holidays unaffordable this year as over 66% of the same group says they will be taking on more debt this holiday season as student loan repayments kick back as a monthly thorn in the side of millions of students.

“The pause on student loan payments is over, and this is a big deal for the economy,” said Jeff Rose, Jeff Rose, CFP and founder of, to The Food Institute.

“Around 43 million people have to start paying back their loans, and it’s hitting at a time when a lot of people are already feeling the pinch with their finances.”

Rose says the average student loan payment is around $500 per month, and that’s a huge expense when combined with the high cost of living and not much to speak of in savings. Rose said it’s another reason grocers and retailers are nervous about hiring more seasonal staff.

“Student loan payments add to the snowball of other financial burdens (e.g., high mortgage rates, car payments) that are pushing Gen-Z and millennials further into debt,” added Andy Friedland, former Amazon grocery executive and CRO of Swiftly, a retail technology company.

“After rent and transportation, grocery takes up the largest share of consumers’ wallets. Now more than ever, shoppers will want to lean on digital promotions offered by their local grocery store to ease the blow that now comes with buying their everyday essentials. To cater to Gen-Z/millennial shoppers, grocers will need to have the technology and loyalty programs to meet consumers’ demand for savings and keep them coming back.”

The debt load is considerably easier for Gen X and the boomers, whose holiday-canceling percentages come in at 15% and 4%, respectively. Many young borrowers believe the return of student loan payments will prevent them from traveling to see family – nearly 32% of Gen Z do not anticipate holiday travel along with 25% of millennials.

Many will have to choose between paying down credit card debt or making another student loan payment. Credit card debt in America totals over $1 trillion – “through the roof,” according to Rose – “and that might mean some credit card bills get pushed aside. If that happens, we could see more people having trouble with their credit​​.”

Getting Through the Holi-daze

For many, the weather outside (and holiday retail outlook) is frightful. The numbers aren’t just limited to recent graduates, either. According to the study, nearly 40% of all Americans intend to spend less on gifts, events, and travel this year when compared to 2022 while another 22% say they’re unable to afford gifts altogether for three primary reasons: the high cost of living (62%), living paycheck to paycheck (52%), and ongoing inflation (47%).

According to ADV’s Holiday Pulse Survey, 50% of all respondents said that inflation will alter their spending on food this Thanksgiving and holiday season.

Nearly 20% of Gen Z respondents will sacrifice necessities to afford the holidays.

“The holidays are often a joyful time of year, but they can also take a toll on consumers’ wallets,” said Courtney Alev, consumer financial advocate at Credit Karma. “This year, many Americans have another expense to factor into their holiday budgets: their federal student loan payments – and, if our survey is any indication, it could be what tips consumers over the edge.”

This year, the edge is awfully precarious. Many analysts expect higher prices than last for Thanksgiving dinner. Despite slowly decreasing food costs, many manufacturers and food/bev employers cite high labor and packaging costs as continuing to drive prices up.

“The drivers of food inflation remain labor and packaging costs,” said Michael Swanson, chief economist for Wells Fargo’s Agri-Food Institute. “Feed costs have fallen with a good production year and steady to weaker demand. Bird flu is not impacting the Thanksgiving supply [this year].”

The Bureau of Labor Statistics shows grocery prices up nearly 17% in the past two years, though the pace of increases has slowed in recent months. The American Farm Bureau Federation projected the average cost of a Thanksgiving dinner for 10 people at $64.05 last year. Though the 2023 estimate has yet to be released, the Consumer Price Index shows food-at-home prices up 2.4%.

For those younger generations who can afford to go a-wassailing among the leaves so green, retailers, grocers, and liquor store owners shouldn’t expect to spike the egg nog too terribly much – a new report from Berenberg research reveals over 64% of Gen Z respondents anticipate drinking less as they grow, that spirits have subsumed beer as the preferred way to imbibe, and the growing THC-infused drink movement is also siphoning sales from more traditional outlets. Gen Z also drinks 20% less per capita than millennials of the same age.