For years, Millennials were seen as the generation burdened by debt and delayed dreams. But in 2025, it’s clear — Gen Z is facing a financial storm far more intense than their predecessors ever did.

According to new research by The TEFL Academy, the gap between income and essential living costs has widened dramatically over the last two decades. Drawing on data from the U.S. Bureau of Labor Statistics, Census Bureau, and Department of Education, the report paints a stark picture of how inflation, housing, transportation, and education expenses have outpaced wage growth — leaving Gen Z struggling to afford even the basics.

A Generation Under Pressure

In 2005, Millennials graduated into an economy where life’s essentials — rent, groceries, education — were still within reach. Fast-forward to 2025, and the financial ground beneath Gen Z is eroding. Despite earning higher salaries in nominal terms, their purchasing power has weakened.

  • Graduate salaries have risen from $39,000 in 2005 to roughly $65,700 in 2025, a modest 12% real increase after adjusting for inflation.

  • Yet, housing, education, and transport costs have increased far faster than wages, leaving less disposable income and more financial anxiety.

“Although prices are expected to rise with inflation, some expenses have increased faster than expected,” the report explains. “This means Gen Z has less money available to cover essentials, leaving them more financially strained than Millennials at the same age.”

Housing: The Dream Deferred

For Millennials in 2005, renting a one-bedroom apartment averaged $759 per month — just 23% of a graduate’s monthly salary. In 2025, that same space costs nearly $1,670, consuming 30% of a typical Gen Z salary.

The result? Fewer young adults are leaving home, and even fewer are buying homes. Financial independence — once a marker of adulthood — now feels out of reach for many in their 20s.

Education: Doubling Down on Debt

Education costs have nearly doubled, making the promise of a degree feel like a double-edged sword.

  • Public university tuition: up from $5,000 in 2005 to $10,000 in 2025.

  • Average student loan repayment: now exceeds $530 per month, compared to $227 (or $376 adjusted) two decades ago — a 41% increase in real repayment burden.

This rising tide of debt forces Gen Z to delay milestones like homeownership, investing, and family planning. For many, the first decade of adulthood is spent not building wealth but repaying it.

Transportation and Everyday Expenses

Getting from point A to B has also become a financial headache.

  • Public transit fares: up from $70 to $130 per month.

  • New car prices: have more than doubled, jumping from $23,000 in 2005 to nearly $49,000 in 2025 — a 112% surge.

  • Fuel costs: have risen by 50%, from $2 per liter to $3 per liter.

The cumulative effect is simple but sobering: it costs more to move, eat, and live than it ever has before.

A Generation Redefining Success

Despite the hardship, Gen Z’s story isn’t one of despair — it’s one of reinvention.

Rhyan O’Sullivan, Managing Director at The TEFL Academy, notes:

“Despite the pressures they face, Gen Z represents a generation that won’t be boxed in. They’re driven not just by survival, but by a desire to live with meaning, to explore, to teach, to connect, and to make an impact.”

That sentiment is embodied by young Americans like Perilie Yang, a TEFL teacher who left the U.S. for a more affordable life abroad.

“Becoming a digital nomad was one of the best decisions I’ve ever made,” she says. “I earn about $2,000 a month teaching online, and my rent in Vietnam was just $350. Living abroad has given me freedom, savings, and a lifestyle that feels sustainable.”

The Bigger Picture

The report, The Cost of Being Young in 2005 vs. 2025 in the United States, highlights a widening affordability gap — one that threatens long-term stability for the nation’s youngest workers.

  • More Gen Z adults live with parents into their late 20s.

  • Marriage, homeownership, and starting families are increasingly delayed.

  • Gig work, freelancing, and side hustles are becoming survival tools.

Without serious action on wage growth, housing affordability, and student debt reform, the gulf between income and essential costs will continue to expand — risking a generation’s ability to build stable, independent lives.

Full report available at:
🌐 https://press.theteflacademy.com/united-states

Report shared by Publisher Lela Christine