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Report #652 | | Members | Sign In
Attracting and Engaging Younger Members Financial Well-being

The Vice Economy: The Modern Temptations Threatening Gen Z’s Financial Future

Gen Z faces rising financial anxiety despite strong wage growth and low unemployment. Research points to two major contributors: social media–driven overconsumption and the expansion of online gambling. This report examines how credit unions can mitigate these risks by offering tailored education and support to strengthen young members’ financial stability.

Every generation faces a series of unique financial headwinds and tailwinds, from recessions and pandemics to technological marvels and booming economies.

Generation Z (born roughly between 1996–2010) is no exception. Volatility and temptation are the words I would use to best describe major themes impacting their views on money and spending.

For credit unions, when it comes to marketing, messaging, support, and education, understanding the unique headwinds and modern vices is imperative. Fintechs and financial institutions are bombarding young people with marketing messaging, but very few are focused on the key money issues causing economic anxiety. By speaking to pressing issues that impact young people, a new generation of prospective members can discover that credit unions are the best institution to serve them.

The Economic Landscape for Gen Z

I’ve been conducting focus groups with young people for nearly twenty years (and when I started, I was one of them). Some themes have stayed constant over the decades—dating woes, first loves, identity struggles, big dreams, unexpected pivots. But over the past six or so years, as my groups have shifted to primarily Gen Z participants, one topic has become much more central: money, or more specifically, the feeling that there isn’t enough of it. I started hearing refrains like, “I’ll never be able to buy a house,” or “I can’t imagine having kids—I’ll never be able to afford it.” I wanted to understand whether this was rooted in actual economic realities or more of an emotional perception. The answer, as it often is, is both.

Let me provide a quick lay of the land on the financial starting line for Generation Z.

Regardless of strong wage growth and low employment, financial anxiety remains high. In other words, on paper things are going surprisingly well for many Gen Zers, but the vibes are off. The gap between objective financial progress and subjective financial stress is referred to as "phantom wealth."

The “always behind” feeling and the elevated financial expectations partially stem from how social media has come to dictate expectations about where to vacation, what kind of house to live in, and which products to buy. Algorithms curate endless images of upgraded lifestyles, making “average” look like failure. Feeling perpetually behind feeds the urge to leapfrog with get-rich-quick schemes—or to binge-spend as relief from constant restraint.

It’s no surprise now that social media-driven overconsumption and the proliferation of online gambling and sports betting are having significant impacts on Gen Z’s spending, saving, and investing. Unchecked, these vices can derail pathways to financial freedom for potential credit union members. 

Welcome to the Always-On Mall

Young people have never been especially great with money—and that’s nothing new. The parts of the brain responsible for self-control and long-term planning don’t fully develop until around age 30. The impulses haven’t changed, but the landscape of temptation has transformed.

Purchasing is frictionless, influencers are persuasive, and the “mall” is always open. In terms of fashion and aesthetics, the trend cycle is moving at a relentless pace. From cottage-core to quiet luxury to mob wives; every few months a new trend emerges giving new opportunity for reinvention. It turns out, reinvention isn’t free.

Boredom, anxiety, and social pressure are key drivers of impulse shopping. In earlier eras, impulse buys were trinkets in a checkout line. Now every craving has a one-click solution.

Social Media’s Overconsumption Engine

A recent study finds a strong correlation between time spent online, compulsive shopping, and spiraling anxiety.

Implications for Credit Unions

Financial Education

Many young people who overspend know that they do it and they know that they shouldn’t. Budgeting apps and goal-setting are tools, but just as a crash diet doesn’t deliver sustainable weight loss, the tools will not address the underlying issue of overconsumption. The constant temptation created by hyper-personalized, algorithmically driven advertising is a genuine challenge. Very smart people have optimized every element of social media to encourage purchases. The knowledge of this reality can help release the shame associated with debt and compulsive spending which can then move people into a place of action and agency.

Platform Specific Features

Help your credit union content gain traction by leveraging the platform-specific features (e.g., TikTok’s Q+A, Instagram Reel polls). Hyper-local content also performs higher than general interest content. Since many credit unions are actively involved in their communities, hyper-local content is a natural fit.

Normalize the Struggle

Credit unions can help combat the “always behind” feeling by normalizing the struggle of being young and finding your financial footing. Host “real money” conversation, panels, or podcast episodes with members in their 20s and 30s so that potential members can hear from peers about setbacks and wins on the road to stability. Credit union can also highlight financial coaches, if that’s something that your credit union provides. Terms like “money mentor” or “financial therapy” are good ways to communicate the offering to a young audience.

We Have Your Back

Messages showcasing the reality of being young and online can show that the credit union understands what it means to be a young adult today. The message and guidance can avoid taking on a paternalistic or condescending tone if the focus is on understanding rather than instruction. Credit unions can focus on a “we get it” tone rather than a “you shouldn’t do this” tone.

The Temptation of a Casino in Your Pocket

Just as the always-on mall creates a new temptation landscape, so too does the accessible casino. Thirty-eight states and Washington, D.C., have legalized sports betting—an industry that now claims more than $100 billion in annual spend from American customers.

The sports betting craze has impacted young men more than any other group. Roughly 60% of college-age men are gambling on sports.13 All of this would be fine (I guess?) if the resulting financial consequences didn’t turn out so bleak. The states with legalized sports betting saw a 1% credit score drop, an 8% increase in collections, a 28% increase in bankruptcies, and a lowered household savings rate.14

Sports betting has woven its way into large swaths of male youth culture through aggressive and targeted advertising.

But sports betting is only one section of this massive, in-your-pocket casino. Stock trading has become its own version of gambling. Among Gen Z, 61% of investors also gamble online or in person, compared to just 29% of non-investors.15

Gambling in the Stock Market

Gen Z’s introduction to the stock market happened quite a bit younger than other generations. While the average “start age” is 19 for Gen Z—compared to 25 for Millennials and over 32 for older generations16—a whopping 25% of U.S. Gen Z investors began investing before age 18.17 It’s just a hunch, but I would venture to guess that this is due to helicopter parents helping their kids get a head start. Either way, today’s young people have had early exposure to the market and they engage with the market differently than older generations.

In other words, this is a generation that sees investing less as a long-term strategy and more as a real-time, emotionally charged experience—shaped by apps, hype cycles, and peer influence just as much as financial education. Understanding this mindset is key for anyone trying to build trust and long-term relationships with young investors.

Implications for Credit Unions

Recommendation Summary
Engagement icon
Normalize the Struggle
  • Go beyond spreadsheets—integrate psychology, behavioral finance, and digital literacy. This can include strategic partnerships with coaches and therapists specializing in addictive behavior and regulation.
  • Recognize today’s temptation landscape in messaging and financial education. Reduce the shame and stigma so that young people can feel empowered to handle financial issues with long-term thinking.
  • When choosing a financial education partner, specifically ask about the resources they provide to help young people navigate the vice economy. In particular, consider what tools they can provide to address social media-driven overconsumption, online gambling, and other forms of temptation.
  • Don’t view this solely as an opportunity for members. Consider this training for employees as well. If an employee does not have their financial house in order, they will not feel confident providing guidance to members.
  • Use relatable language and platforms (e.g., Reels, YouTube Shorts) to talk about financial triggers.
Engagement icon
Coach the Mindset
  • Workshops, virtual sessions, and blog posts can blend budgeting with habit-change science.
  • Financial education and marketing messaging typically talks about budgeting or offers advice on how to spend less. Credit unions can take things a step further by speaking the language of the moment and providing mindset shifts.
Engagement icon
Guardrails
  • Explore friction-creating technology. For example, an in-app nudge, “You’ve hit 80% of your discretionary budget this month—review before you swipe?”
Engagement icon
Potential Partnerships
    • Explore co-branded programs with campus counselors or digital wellness nonprofits.
    • Position the CU as a holistic ally, not just a lender or place to bank.

Gen Z is entering adulthood with unprecedented tools for wealth creation—and unprecedented temptations to sabotage it. While this article focuses on Gen Z, these challenges are not confined to the youngest generation. Members across the spectrum are grappling with the pull of customized ads, gamified spending, and always-on malls. None of us are entirely immune to the vice economy, and financial institutions that ignore this reality risk leaving members of every age more vulnerable to instability.

For credit unions, the opportunity is twofold. By normalizing the struggle, coaching healthier mindsets, and embedding smart guardrails, credit unions can help members of all ages maintain a sense of stability in a chaotic environment. This isn’t only mission-driven work; it’s also a business imperative. Members who feel supported in resisting these traps are more likely to build sustainable savings, remain loyal, and deepen their relationship with their credit unions. In an era of fleeting attention and rising financial stress, credit unions that marry classic cooperative values with modern behavioral insight can turn today’s vice economy into a point of differentiation—strengthening both member resilience and the credit union movement for decades to come.

Endnotes

  1. Hanson, Melanie. 2024. “Student Loan Debt by Generation (2024): Millennials, Gen Z, etc.” Education Data Initiative. Last updated November 21, 2024. Accessed September 10, 2025. https://educationdata.org/student-loan-debt-by-generation
  2. Ibid.
  3. Latu, Dan, and Madison Hoff. 2025. “Five Years Ago, Only 85 U.S. Cities Had Starter Homes That Cost at Least $1 Million. Now There Are 233.” Business Insider. April 26. Accessed September 10, 2025. https://www.businessinsider.com/starter-homes-prices-expensive-cost-1-million-us-cities-zillow-2025-4
  4. Board of Governors of the Federal Reserve System. 2025. “Distribution of Household Wealth in the U.S. since 1989: Net Worth by Generation (Levels).” Federal Reserve Z.1: Distributional Financial Accounts. Accessed September 10, 2025. https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/#quarter:138;series:Net%20worth;demographic:generation;population:all;units:levels
  5. Davis, Maggie. “Millennials in Better Financial Condition Than Previous Generations.” LendingTree. Updated October 14, 2024. Accessed September 10, 2025. https://www.lendingtree.com/debt-consolidation/millennials-financial-condition-study/
  6. The Harris Poll. “America This Week: Wave 188.” The Harris Poll: America This Week (brief, October 4, 2023). Accessed September 10, 2025. https://theharrispoll.com/briefs/america-this-week-wave-188/
  7. Anderson, Dana. 2023. “Redfin Survey: 1 in 5 Millennial Respondents Believe They’ll Never Own a Home.” Redfin Real Estate News. September 7. Accessed September 10, 2025. https://www.redfin.com/news/gen-z-millennial-affordability-barrier-to-homeownership
  8. Axios Media Inc. 2024. “What It Takes to Be ‘Financially Successful’ by Generation.” Axios. November 22. Accessed September 10, 2025. https://www.axios.com/2024/11/22/boomers-gen-z-millennials-financial-success
  9. Board of Governors of the Federal Reserve System (U.S.). 2025. Total Consumer Credit Owned and Securitized [TOTALSL]. FRED, Federal Reserve Bank of St. Louis. Accessed September 10, 2025. https://fred.stlouisfed.org/series/TOTALSL
  10. Snodgrass, Erin. 2024. “Generation Credit Card: Why Gen Z Is Reaching for Their Plastic Way More Than Millennials Did.” Business Insider. December 4, 2024. Accessed September 10, 2025. https://www.businessinsider.com/generation-credit-card-gen-z-high-levels-debt-spending-points-2024-12
  11. Ibid.
  12. Julie Jargon and Ann-Marie Alcántara. “How TikTok Is Wiring Gen Z’s Money Brain.” The Wall Street Journal. May 5, 2024. Accessed September 10, 2025. https://www.wsj.com/tech/personal-tech/how-tiktok-is-wiring-gen-zs-money-brain-fc43ba6c
  13. Kafka, Peter. “Why the Author of ‘The Big Short’ and ‘Moneyball’ Thinks the Sports Betting Boom Is Going to Be a Disaster.” Business Insider. February 5, 2025. Accessed September 10, 2025. https://www.businessinsider.com/michael-lewis-sports-betting-podcast-peter-kafka-interview-2025-2
  14. Hollenbeck, Brett, Poet Larsen, and Davide Proserpio. The Financial Consequences of Legalized Sports Gambling. Working paper. UCLA Anderson School of Management and University of Southern California. July 23, 2024; revised October 23, 2024. Available at SSRN: https://ssrn.com/abstract=4903302
  15. CFA Institute. “Beware the Blurred Line Between Investing and Gambling.” CFA Institute Insights. May 20, 2024. Accessed September 10, 2025. https://www.cfainstitute.org/insights/articles/investing-vs-gambling
  16. Kafka, Peter. “Why the Author of ‘The Big Short’ and ‘Moneyball’ Thinks the Sports Betting Boom Is Going to Be a Disaster.” Business Insider. February 5, 2025. Accessed September 10, 2025. https://www.businessinsider.com/michael-lewis-sports-betting-podcast-peter-kafka-interview-2025-2
  17. FINRA Investor Education Foundation and CFA Institute. Gen Z and Investing: Social Media, Crypto, FOMO, and Family. Working paper. May 2023. Available at SSRN: https://ssrn.com/abstract=4903302
  18. Teo, Kai Xiang. “Gen Z Is Trading Stocks More Actively Than Any Other Generation — But That Might Not Be the Best Play, Says a Bankrate Analyst.” Business Insider. August 24, 2023. Accessed September 15, 2025. https://www.businessinsider.com/gen-z-investors-influenced-inflation-higher-interest-rates-bad-analyst-2023-8
  19. North American Securities Administrators Association (NASAA). NASAA Comment Letter Re: FINRA Regulatory Notice 24-13: Retrospective Rule Review: Day Trading. Letter to Jennifer Piorko Mitchell, Office of the Corporate Secretary, FINRA. January 28, 2025. Accessed September 15, 2025. https://www.nasaa.org/wp-content/uploads/2025/01/NASAA-Comment-Letter-re-FINRA-Reg-Notice-24-13-01-28-2025.pdf
  20. FINRA Investor Education Foundation and CFA Institute. Gen Z and Investing: Social Media, Crypto, FOMO, and Family. Working paper. May 2023. Available at SSRN: https://ssrn.com/abstract=4903302

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