“It makes sense that they feel this way, given the economic setbacks of the last few years,” says Bobbi Rebell, CFP, a personal finance expert at CardRates.com.

Fintech app developer Frich carried out an anonymous data analysis of its community of one million Gen Z users, examining sentiment about savings goals, money stress, and attitudes toward financial emergencies. Their findings shed a concerning light on the financial habits of younger Americans

One of the many mental hurdles reported by members of Gen Z is that savings feel pointless when no one listens to their frustrations and instead talks at them without understanding the thinking behind their actions.

These feelings of frustration are having a major impact on the saving and spending habits of Gen Z, and their perceived lack of good advice has made many turn to unconventional sources—think TikTok influencers or other online communities—to gain a sense of understanding about their money. 

Gen Z feels overwhelmed, is not planning for emergencies

According to Bankrate’s latest emergency savings report, as many as 27% of Gen Z carry more debt than they do savings. Many want to save for larger goals, with Frich reporting that more than 20% would like to save up to buy their first home.

According to Aleksandra Medina, chief product officer and co-founder of Frich, the current economic environment has made it challenging for Gen Z to prioritize savings. 

“Many Gen Zers find themselves walking a financial tightrope, torn between covering immediate expenses or setting money aside for emergencies and paying for goods on credit instead,” she says.

The challenging markets they face feel insurmountable, leading to spending more on experiences or goods that provide instant gratification. To combat this feeling of powerlessness, Rebell poses a few questions that may help consumers—of any age—reconsider how they view their spending:

• How do you feel after spending money on an impulse purchase? How long does that feeling last? This question can encourage consumers to consider any sense of stress or dread they may feel if they were faced with an emergency.
• How would you handle a financial emergency? Some consumers may not consider this until an emergency is staring them in the face, but research from Frich suggests that nearly one-third of Gen Z would ask a family member for assistance, while another 25% would prefer to take on additional debt instead.
• If you had to take on additional debt, how hard would it be to pay off? Examining the consequences of this potential option may reframe the situation and encourage someone to start implementing a savings plan.

Rebell emphasizes that when offering advice to young potential savers, “The key is to listen, not lecture.”

Now is a great time to build savings, no matter your age

For the 53% of respondents to Frich’s survey who said they do have an emergency fund, there’s still work to be done: On average, they reported having less than $7,000 set aside for emergencies. And while that’s not insignificant for many, the loss of a job or a bad car accident could wipe that out in a heartbeat.

To bolster savings and provide the best chance of success, Rebell recommends getting started on an automated savings plan—preferably in a high-yield savings account. 

“I would also suggest setting up an automatic increase so that, for example, every few months, their savings rate would increase and continue to build,” she adds. Start with a small amount, such as $20 or $40 per paycheck, and grow from there.

Read more from Fortune

Other options such as certificates of deposit are a great way to lock in the currently-high yields, but remember to keep the big picture in mind. 

“Emergency funds need to be liquid, or there really is no point. You need to be able to access the money immediately,” reminds Gerry Barrasso, CPA, CFP, president at United Financial Planning Group. He recommends opening a low- or no-fee savings account, or even a money market account. “Most might think a checking account is great for [quick access to your funds], but the problem is you aren’t earning any interest.” 

While interest rates have fallen from the record highs of 2023-2024, the Federal Reserve has paused further rate cuts. This means that earnings on savings vehicles such as HYSAs and CDs are still much higher than they were before the pandemic, with some offering annual percentage yields of up to 5.00%. 

While savings account rates are subject to change at any time, the sooner you open one to take advantage of today’s strong yields, the better for your emergency fund.

The takeaway

“The resurgence of financial pressure leaves little room for Gen Z to save in the same way previous generations did,” says Medina. For those struggling to get ahead, regardless of age, know that you’re not alone: Bankrate reports that nearly one-third of Americans carry more credit card debt than they hold in savings. 

But all hope is not lost. Sure, inflation may be on the rise again, but strategically optimizing your savings with CDs and other high-yield products can help ensure your finances keep up. If credit card debt is overwhelming you, Rebell suggests looking into a 0% APR balance transfer card that will give you more time to pay things off. “Just be careful not to run up the debt again,” she warns.

Start small, stay consistent, and leverage available tools and resources to make a positive impact on your financial wellbeing.