The Affordability Crisis for Two of Our Best Generations

Let’s set the record straight on Gen Z and millennials. The stereotypes are wrong. Our company, Ramsey Solutions, has about 1,000 team members, and around 700 of them fall into these two generations. We have been told that they are participation-trophy-entitled brats who live in their mother’s basement. That’s not true of the ones who work on our team, and it’s not true of the ones I meet who are ultrahigh performers.

These are the easiest generations to lead and to hire because they treasure authenticity. They are who they are, and they don’t care if you don’t like it. We’ve interviewed hundreds of Gen Z and millennial job candidates, and we’ve figured out—there is no middle ground. They’re either awesome or they suck, and you know in just a few minutes which you’re talking to.

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As a baby boomer and their leader, I’ve learned some important things about them. These are the first two generations to have a magic wand (a smartphone) in their hands since birth. They don’t know a world where the only phone in the house is the black rotary phone attached to the wall, where you have to walk into the kitchen to talk to your girlfriend “in private.”

The world they know allows you to push a button on a device in your hand, and whatever you want shows up on your porch in a few hours. Push another button and instantly answer any question based on the wealth of all of human knowledge. This magic wand mentality has taught them to believe anything is possible. They assume abundance, not scarcity, so they are fearless in some regards. When they believe in a mission, they will charge the gates of hell with a water pistol.

On our team, that abundance mentality and mission focus is priceless to our business. Those team members dream up products and ways to serve our customers that I would never come up with on my own.

However, there is a downside. Because everything has an easy button, sometimes Gen Z and millennials struggle with patience. They have always “gotten there” quickly and easily, so when they have to gut through a tough patch and show real grit, it feels foreign to them. This impatience is often misunderstood and mislabeled by other generations as entitlement.

Again, for the members of the younger generations who really do live in their mother’s basement, entitlement might be the correct word. But for those I interact with, their reaction is more like a dog tilting its head with a look of disbelief or curiosity when something gets really messy.

In the news today, these generations face an “Affordability Crisis” due to years of post-COVID runaway inflation and a housing market that seems to them to have boxed them out. The result: Every day on social media, they tell each other that the American Dream is dead and that you have to have a family compound to ever be able to buy a home. Neither of these statements are even close to true, but sadly some of them believe it.

To set the record straight, their budgets are very tight, and their first home purchase—which will open the door to the American Dream—does seem out of reach. But our numbers tell us that this phenomenon is not caused by pricing. It’s caused by many of our large institutions screwing these two generations. Here’s what I mean:

Big Banks have thoroughly convinced Gen Z and millennials that credit card debt is part of life and good for your FICO score. So, they carry record levels of credit card debt, not realizing they’re being brainwashed. Through the magic wand in their hand, they’ve had Samuel L. Jackson and John Travolta asking on behalf of Capital One, “What’s in your wallet?” Talk about pulp fiction. (Note to my Gen Z and millennial friends: What’s in Samuel L. Jackson’s wallet is a lot of money from these commercials — so much that he has to pull around a wagon full of cash. And the actor playing the Capital One Guy does not live in the Capital One lobby, but in a huge mansion that was partially paid for by the company that has screwed you.)

The big car companies have also screwed you. They insist that leasing your car is good for you, while the numbers show a lease is the most expensive way to operate a car—and it makes the car companies the most possible money. Today, car debt is at its highest level in the history of cars. Over 20% of the new cars that left the lot last quarter had a payment over $1,000 per month.¹ The magic wand may bring convenience, but it also carries the ads and mythology that have convinced you that “used” cars are unreliable and put your family’s lives at risk. Neither are true.

And in the worst example of how our institutions have screwed these two generations, there is the epic failure of the student loan debacle. Big Banks love to lend $150,000 to an 18-year-old who can’t even buy beer because our stupid government continues to guarantee these loans, making it zero risk to the bank. Otherwise, no bank on the planet would make that loan.

We now sit at over $1.6 trillion in this sewer of student debt, and Congress and the president continue to offer up this unlimited supply of money, driving up the cost of tuition faster than any other major expense—including food, housing and health care.²

The truth is, the reason we have an Affordability Crisis is not because of inflation or even rising house prices. The reason these two generations face an Affordability Crisis is because they have no disposable income left after making all their payments on their record levels of debt. They have been screwed and allowed themselves to be screwed.

To my young friends in those two generations: I am your biggest fan and defender. But socialism to replace “evil capitalism” is not your answer, and neither is a family compound. Your economic issues are not proof the American Dream is dead. On the contrary, it’s easier to become a millionaire in America today than at any time or place in human history. You’ve been screwed, but some of you have not properly placed the blame.

The answer to your Affordability Crisis is to quit playing kissy-face with the people who are out to screw you. Get rid of the ridiculous credit cards and debt. Sell the $80,000 F-150, get a reliable used Toyota with no payments and work like you mean it to pay off your student loans—because the stupid government is not going to forgive them. When you sweat, side hustle and lower your lifestyle for a period of time, you will find yourself debt-free. When you have no payments, you’ll have disposable income to save for a good down payment on a home. ... That is when the math will math.

To my older friends: These might be the two best generations ever. Instead of shouting at them to “get off my lawn,” love them by protecting them from these forces screwing them. Don’t tell them to build their FICO score—which is not a measure of winning financially, but only a measure of how often you play kissy-face with the banks. Tell them to sacrifice to win like you did. Show them the wisdom in driving a used car with no payments so you can get a house, and then you can get a new car after you’re a millionaire. And please, please, please, make Congress stop screwing our youth with the student loan hoax.

Remember, when you see these generations being impatient, it isn’t entitlement but rather an abundance mentality. Because the magic wand is native to them, and their brains don’t work like ours.

Love them. They’re worth it.