25% of Gen Z workers are supporting family members — and risking their own financial future

Gen Z may stand as the youngest generation in the workforce, but while they're just starting to build their own financial foundation, they're already feeling the weight and pressure of providing for a family. 

Twenty-five percent of Gen Z-ers in the U.S. are working, while studying, to help financially support their parents in a challenging economy according to a recent study of 2000 people from EduBirdie, an academic aid platform. As a result, two out of three young workers lack the money to cover their own basic needs, straining both their financial and mental health. 

"Across all generations we are experiencing incredibly challenging economic conditions," says Dina Caggiula, head of participant experience at Vanguard. "But when you think about inflation rates — which are sky high — and the student loan crisis, it's all disproportionately affecting Gen Z." 

Read more: 98% of Gen Z is burned out. How can employers respond?

Most Gen Z-ers (70%) feel the education system has failed to teach them how to manage their money, according to the study. When asked about what education areas they want to be improved most, financial literacy was the top choice for 47% of respondents, followed by communication and time management skills. 

For those that have already entered the workforce, any collegiate shift in financial literacy education will prove too late, but other institutions, including the workplace, can take the lead in bridging the gap for their young adult employees, Caggiula says.

"There's this great intersection right now between plan sponsors, financial services firms and then even the government," she says. "We're all trying to come together to figure out how to solve this problem."

Some of the solutions that have come out of those efforts include the Secure Act 2.0, which allows employers to actually match employee contributions to loan payments, similar to a 401(k) match program. The more an employer can personalize an experience to the needs of their young workers, the greater likelihood they'll embrace those options, Caggiula says. 

Read more: How Gen Z is building successful careers without college degrees

"We have to make sure that we're doing rapid experimentation to try and figure out the channels we need to communicate with Gen Z," she says. "Maybe there will be job loss, and sometimes trying to support family members falls on their shoulders — so we want to make sure that they've got resources." 

At Vanguard, data points about participants to try to inform suggested next best actions, which has proven to be significantly more effective compared to sending out generic messaging to all users. Employers could be using the same mentality at work. 

"The financial wellness solutions we're talking about today like emergency savings solutions and  student loan matching, that's, that's starting to become an expectation," Caggiula says. "And Gen Z are incredibly valuable to the workforce, so you need to make sure that we're giving them the best offer possible."