Specialists Respond to the 10 Most Common Financial Questions Gen Z Has About Saving and Investing

Why Gen Z Is Losing Sleep Over Finances—and What Can Help

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Many members of Generation Z report that financial worries are keeping them up at night. Financial experts share practical steps to address these concerns.

Main Insights

• Gen Z’s top financial anxieties can be managed with actionable solutions.
• Building an emergency fund of $10,000 to $20,000 can help prevent debt during tough times.
• You don’t have to pick between paying off debt and investing—splitting your efforts each month helps you avoid growing interest while still benefiting from market growth.
• Consistent, small financial habits can quickly make a big difference.

According to recent surveys, 70% of Gen Z say money worries disrupt their sleep. This stress is rooted in reality: in 2025, the average credit score for young adults fell to 676, marking the sharpest drop among all generations.

We spoke with Ken Mahoney, CEO of Mahoney Asset Management, and Taylor Kovar, CEO and founder of 11 Financial, to get their advice on Gen Z’s most pressing financial questions.

1. How Much Should You Have Saved by 25?

There’s no single savings goal for everyone at 25, since income and expenses vary widely. Taylor Kovar suggests aiming to save at least one month’s living expenses as a starting point, then increasing your savings as your career advances.

Ken Mahoney recommends having $10,000 to $20,000 set aside for emergencies by age 25. This “safety net” can help you avoid debt if you face unexpected setbacks like job loss.

If you haven’t reached that amount yet, don’t stress—many young adults are in the same boat. The key is to start building momentum. Mahoney emphasizes the importance of contributing to a 401(k) or IRA as early and as often as possible, within your means.

Reaching early savings goals can help establish positive financial habits for the future, Kovar adds.

2. Should You Prioritize Investing or Paying Off Debt?

Mahoney believes you don’t have to choose one over the other. Focusing only on debt repayment could mean missing out on investment growth, while investing exclusively could let high-interest debt accumulate faster than your returns.

His advice: allocate money each month to both debt payments and retirement savings to balance both goals.

3. How Can You Build Credit Without Accumulating Debt?

Use your credit card as if it were a debit card—never spend more than you can pay off immediately. Mahoney warns against making only minimum payments, as this can lead to unnecessary interest charges.

Both Mahoney and Kovar recommend paying off your credit card balance as soon as charges appear, rather than waiting for your statement. This approach helps you build credit without incurring interest. If you want more structure, Kovar suggests starting with a secured credit card.

4. How to Begin Investing with Limited Funds

Even small investments can add up over time. Open a brokerage or retirement account, select an index fund that tracks the overall market, and contribute whenever your budget allows. Using dollar cost averaging—investing a set amount at regular intervals—can help smooth out market fluctuations.

Mahoney also recommends learning the basics of investing. He suggests William J. O’Neil’s book, "How To Make Money In Stocks," as a helpful resource.

5. Is Cryptocurrency a Good Option?

Mahoney views bitcoin as a notable exception in the crypto space due to its decentralized nature. However, he cautions that most other cryptocurrencies are driven by speculation and may not be worth considering.

6. How to Balance Rent Payments and Saving

Mahoney notes that everyone’s situation is different, but recommends examining the cost of daily habits. Cutting back on food delivery or unused subscriptions can free up extra cash. For example, preparing meals at home is often much cheaper than ordering in, and these savings add up over time.

Look for opportunities to eliminate unnecessary expenses to boost your savings.

7. How Much of Your Income Can You Spend on Fun?

Mahoney stresses that focusing solely on saving without enjoying life is not the right approach. He suggests the “cash stuffing” method: set aside a specific amount of cash for leisure activities to avoid overspending.

Financial planners often recommend allocating between 5% and 20% of your take-home pay for entertainment, depending on your debt and other obligations. The important thing is to set a limit you can stick to without derailing your budget.

8. Should You Open a Roth Account Now or Wait?

Opening a Roth IRA or 401(k) can be especially beneficial for younger earners, Mahoney explains. Since contributions are made with after-tax dollars, withdrawals in retirement are tax-free.

Because you’re likely in a lower tax bracket now than you will be later, paying taxes upfront can be advantageous. In fact, nearly 20% of Gen Z workers are already contributing to a Roth 401(k), according to Fidelity (source).

9. How to Budget with an Unpredictable Income

Start by making sure your fixed expenses—like rent and car payments—are covered. When you have a higher-earning month, immediately set aside the extra to create a cushion for leaner times.

Mahoney advises treating any surplus as savings, not as extra spending money.

10. What to Do If You Lose Money in the Stock Market

If you experience losses in the market or with speculative investments like crypto or forex, Kovar recommends taking a step back to analyze what happened and focusing on your long-term objectives instead of reacting emotionally.

Learning from your mistakes is key. Before making new trades, Mahoney suggests familiarizing yourself with stop-loss orders—predetermined points to exit a trade and limit losses.

He also recommends setting a maximum loss limit for each day, week, or month, noting that recovering from a 50% loss requires a 100% gain just to break even.