• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Reckless spending

Rylie’s a part-time student and a full-time receptionist at a local budget hotel. Her monthly income is around $2,000, which could be enough to live on if she didn’t have a budgeting problem.

Rylie spends $1,400 a month — 70% of her income — on rent. That’s above the average rent in San Antonio, which is $1,290 according to RentCafe. In fact, 24% of apartments in the city can be rented for $1,000 or less.

“You cannot afford it,” Hammer explained. General wisdom among finance experts is that housing costs should account for about 30% of a person’s income.

Overspending on housing leaves little room for Rylie’s other expenses. However, that hasn’t stopped her from frequently eating out and shopping online. These expenses are funded from her credit cards. Her credit card debt, at its peak, was around $4,000.

By comparison, Gen Z Americans — aged 18 to 26 — have an average of $3,262 in credit card debt, according to Experian’s latest consumer debt report. This cohort has been borrowing at a faster rate than others. Gen Z’s total debt balance grew 15.4% in 2023.

Younger Americans might also have access to another source of credit: their parents.

Kiss Your Credit Card Debt Goodbye

Millions of Americans are struggling to crawl out of debt in the face of record-high interest rates. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff. Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.

Explore better rates

Bank of Mom and Dad

When Rylie’s parents realized her credit card balances were unsustainable, they stepped in and paid most of it off.

Hammer accuses her parents of serving as enablers and an invisible safety net. This isn’t unusual for someone her age. In fact, 61% of Gen Z say they are somewhat dependent on their parents for financial support, according to research from Experian. Around 37% of both Gen Z and millennials say their parents did not teach them about personal finances.

Hammer advises Rylie’s mom, who appeared in-studio but not on-camera, to stop funding her reckless spending and demand behavioral change in return for financial assistance. He suggests Rylie pay off her remaining credit card balance of $1,418 herself to learn how to manage her own finances and be responsible.

He believes she can manage the minimum monthly payments based on her current income.

“You can easily fit that in your budget,” Hammer said. “Then what you're learning, for the first time in your life, is how to sacrifice your finances [and be] an adult.”


This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Vishesh Raisinghani Freelance Writer

Vishesh Raisinghani is a freelance contributor at MoneyWise. He has been writing about financial markets and economics since 2014 - having covered family offices, private equity, real estate, cryptocurrencies, and tech stocks over that period. His work has appeared in Seeking Alpha, Motley Fool Canada, Motley Fool UK, Mergers & Acquisitions, National Post, Financial Post, and Yahoo Canada.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.