Research by National Debt Relief has found that younger Americans are more likely to seek financial advice from AI rather than from relatives and friends. They also tend to prioritize financial security over having children, and find it more difficult to achieve a "debt-free" lifestyle.

New York, September 30th / PRNewswire / -- A leading institution in the debt settlement industry and a provider of high-rated debt relief solutions in the United States, National Debt Relief, today released the results of a new survey conducted in collaboration with Wakefield Research. The survey shows that Generation Z and millennials generally carry significant debts, which not only affects their approach to dealing with financial challenges but also impacts their interpersonal relationships, consumption behavior, and major life decisions.

This survey, which involved 2,000 adult Americans representative of the national population and included 550 Millennial respondents, increased the total number of Gen Z respondents to 500 through additional interviews. The survey found that 87% of Millennials and 77% of Gen Z currently have debts. The results show that the younger generation is dealing with this financial pressure in new ways that, in some cases, are also more risky, ranging from seeking judgment-free advice through AI to attempting to repay debts through gambling.

Main findings:

• 73% of millennials and 60% of Gen Z are burdened with unsecured debt, with credit card debt being the most common type.
• Approximately 7 out of 10 millennials (69%) and 6 out of more than 10 Gen Z individuals (64%) have sought advice on financial issues using AI.
• 65% of millennials and 53% of Gen Z indicate that they are more willing to discuss financial difficulties with AI than with their closest loved ones.
• Nearly two-thirds of Generation Z (65%) and half of Millennials (49%) who gamble regularly have attempted to use gambling as a means to repay debts.
• Approximately 7 out of 10 individuals from the Millennial generation and 7 out of 10 from the Gen Z generation (71% and 69% respectively) who are in debt stated that convenient consumption has exacerbated their debt burdens.
• More than 7 out of 10 people from Generation Z (72%) believe that financial security should be given priority, even if that means not having children.
• Nearly half of millennials (49%) consider the debt level of a potential romantic partner to be one of the top three things they would most want to know about, ranking it above criminal record, religious beliefs, and political views.

Financial Mindset and Behavior: Why Does Debt Seem Inevitable?

Rising daily expenses and unexpected financial pressures make what is already a tight budget even more difficult to manage for millennials and gen Z. These pressures are pushing the younger generation further into debt and obscuring their financial prospects.

• Unsecured debt is prevalent among the younger generation:73% of millennials and 60% of Gen Z carry unsecured debt, while among the Baby Boomer generation, this proportion is less than half (46%).
• The most common type of credit card debt:Both millennials and Generation Z list credit cards as the most common source of debt, however, the proportion of millennials who carry this type of debt month by month is significantly higher (56% versus 37%).
• Rising living costs and unexpected expenses drive up the debt burden:Rising living costs, as well as unexpected events such as sudden medical bills, emergency repairs to homes or cars, or a sudden interruption in income, are putting significant pressure on millennials; they cite economic factors (49%) and unexpected expenses (49%) as the most common reasons for debt over the past year. Gen Z, on the other hand, lists unexpected expenses (40%) as the primary reason.
• Daily convenient consumption is accumulating into a burden:Approximately 7 out of 10 individuals from the Millennial and Gen Z generations (71% and 69% respectively) who are in debt stated that convenient forms of consumption such as subscription services, food delivery, and shopping through social media have contributed to their increasing debts; in contrast, this figure is 51% for Gen X and 33% for the Baby Boomer generation.
• Consumption as a way to "reward oneself" may exceed one's affordability:The urge to “treat oneself” sometimes overcomes financial constraints. 72% of millennials and 64% of Gen Z admit that they have bought things they felt were “worth it” even when they couldn’t afford them at the time; among Baby Boomers, this proportion is only 36%.
• A debt-free future seems out of reach:The expectations of many millennials regarding financial stability are changing; nearly half (46%) indicate that a debt-free life is not realistic for them, while among Generation Z, this proportion is one-third (33%).

AI and Financial Decision-Making: Are AI Becoming New Financial Partners?

More and more young Americans are turning to AI as a source of financial advice that is private, always available, and does not judge their financial situation. This change in behavior is altering the way the younger generation understands and makes financial decisions.

• AI is becoming an important source of financial advice:AI has become a part of the financial decision-making process for most young Americans. 69% of millennials and 64% of Gen Z say they have sought advice on financial challenges or difficulties from AI; in contrast, only 45% of Gen X and 23% of the Baby Boomer generation have done so.
• Quick response is the main attraction:Speed is a major attraction; over 10 millennials and 6 Gen Z users each (62% and 61% respectively) AI use it to quickly answer financial questions.
• It's important to have suggestions without judgment:For Generation Z (42%) and Millennials (39%), obtaining judgment-free advice is an important reason for using AI, a proportion that is comparable to those who make budgets or financial plans (44% and 39% respectively).
• Compared to friends and family, AI might be more likely to speak up:The affinity of AI has led to 65% of millennials and 53% of Gen Z indicating that they are more willing to discuss financial difficulties with AI than with their closest loved ones.
• AI is significantly influencing major consumer decisions:The influence of AI has extended from recommendations to consumer decisions; 46% of millennials and 35% of Gen Z respondents stated that AI encouraged them to make large purchases they were otherwise unsure about.
• Traditional financial resources are still more trusted:Although more and more young people use AI to obtain financial advice, traditional financial resources remain their most trusted source. Only 22% of millennials and 16% of Gen Z consider AI to be the most trustworthy source, while the proportion of those who rank traditional sources first is 59% for millennials and 69% for Gen Z.

National Debt Relief Vice President of Customer Research and Insights Cathleen Bell stated: "These data indicate that young Americans are willing to seek help for their finances, but the way they seek that help is changing. At National Debt Relief, we know that AI can be a useful starting point, but dealing with debt often requires reliable professional guidance to better understand the available options. We believe that personalized advice and clear plans can better help those deeply in debt to build confidence and feel supported, thereby taking action to get out of debt."

Financial Risk Taking: Are Young Americans Getting Rid of Debt by Gambling?

Millennials and Gen Z participate in sports betting, prediction markets, and other alternative financial activities at a considerable rate. For many, these activities are not just forms of entertainment or investment; they also serve as strategies to alleviate financial stress. As some continue to borrow money to gamble, the younger generation faces the risk of falling into a cycle of debt.

• Millennials have the highest level of participation:More than 6 out of 10 millennials (62%) stated that they frequently participate in at least one type of activity, such as sports betting, casino gambling, fantasy sports, prediction markets, day trading, or lotteries; among Generation Z, this proportion is slightly less than half (45%).
• Debt is driving the assumption of financial risks:Among those who frequently participate in these activities, 65% of Generation Z and 49% of Millennials stated that they have gambled, traded, or engaged in similar activities in order to repay debts; for Generation X, this figure is 39%, and for the Baby Boomer generation, it is 19%.

Money, Values, and the Future: How Debt Shapes the Personal Lives of Young Americans?

For Generation Z and millennials, the pressure of fearing judgment due to debt can be just as burdensome as the debt itself. The cautious attitude of young Americans towards financial issues is also affecting their perceptions of their peers and potential partners, as well as their priorities in family planning.

• Debt can sometimes be more difficult to talk about than one's weight:Debt may be more sensitive than other extremely private information; 60% of millennials and nearly the same proportion of Gen Z (59%) say they would rather disclose their weight publicly than their total debt.
• Debt affects dating:For millennials, the debt of potential partners may be a more critical factor than traditional matching issues. Nearly half (49%) would list debt as one of the top three things they want to know before entering into a serious relationship, ranking it above criminal record (48%), religious beliefs (47%), and political views (37%).
• Generation Z will also consider debt in their relationships:Generation Z places more emphasis on other matching factors, but still, 40% of them consider a potential partner's debts to be one of the top three things they want to know before entering into a serious relationship.
• Financial security takes precedence over childbearing:Over 10 people from Generation Z, 7 of them (72%), stated that financial security should be a priority, even if that means not having children; among millennials, this proportion is 54%.
• Venmo Usage habits will also be evaluated:25% of millennials stated that they have formed opinions about their financial habits based on someone's Venmo transactions; this figure is 17% for Generation Z and 15% for the general population in the United States.

The personal finance expert from National Debt Relief, Dr. The Joyful Money Doctor Timi Joy Jorgensen, stated: "These data tell us that money is still closely linked to how we perceive others' evaluations of ourselves, and for the younger generation, debt carries a significant stigma. Without honest conversations about finances, these negative perceptions of debt can lead to feelings of shame and isolation. No financial situation is the same, and for young people just entering into a relationship, discussing finances openly as early as possible can shed light on situations that may lead to debt, and replace unfair assumptions with an understanding based on honest financial adaptation."

How does debt settlement help young Americans build financial stability?

Among those with unsecured debts (such as credit cards, medical bills, personal loans, "buy now, pay later"), more than a third of millennials (38%) and over a quarter of Gen Z (27%) stated that they owe $7,500 or more. For consumers carrying $7,500 or more in unsecured debt, debt settlement is an option worth considering.

Bell indicates that debt can be overwhelming, especially for young adults who are just starting out, building their independence, and at the same time facing rising daily costs and increasing economic pressures. At National Debt Relief, we help people take the first step in understanding the debt they carry and the available solutions. For those suitable for debt settlement, this means creating a plan that fits their financial situation and budget. Seeking help is not a sign of financial failure; it could be the first step towards taking control of the situation again and moving forward with confidence.

National Debt Relief focuses on debt settlement, which involves experienced negotiators communicating directly with creditors on behalf of clients to reduce the total amount of unsecured debts that meet certain criteria. The projects offered by National Debt Relief are designed to help consumers resolve their debts more quickly than relying solely on minimum payments and to avoid bankruptcy. For more information, please visit NationalDebtRelief.com or call 1-800-718-0487 to schedule a free and confidential consultation with a certified debt expert.

About National Debt Relief

Since 2009, National Debt Relief has been helping people face their debts with more confidence. As a leader in the debt settlement industry, the company has made the process of getting rid of debt less burdensome and more empowering. National Debt Relief is an A+ certified business by the Better Business Bureau of America (BBB), has been rated as the best debt relief company for four consecutive years by Forbes Advisor, and is also the debt settlement company with the highest reviews and ratings on ConsumerAffairs. The company has registered over 1.5 million people to join its program, helping them take an important step towards resolving their debts and thus regaining a sense of financial and emotional integrity. For more information, please visit NationalDebtRelief.com.

Investigation Methods

The survey for National Debt Relief was conducted by Wakefield Research through a custom online survey targeting 2,000 American adults aged 18 and above, representing the national population. The survey included 20 content-related questions, as well as customized screening questions and demographic questions. There were 550 Millennial respondents, and the total number of Gen Z respondents was increased to 500 through additional interviews.