Americans are hearing that the economy is doing well and that the stock market is hitting record highs. But many young Americans still feel they are struggling with money. The strong economy does not always feel strong in their daily lives. Many young people are worried about their bank accounts, bills and debt.
Personal finance expert Dave Ramsey says debt is one major reason why younger Americans may not feel the benefits of a strong stock market. He made the comments in a recent interview with Fox News while discussing why many Americans remain worried about their finances even as stocks continue to reach record highs.
Gen Z debt is growing
“The problem is feelings aren’t facts,” Ramsey said during the Fox News interview. He argued that financial stress can make people feel worse about the economy even when some economic indicators look strong. For Gen Z and millennials, the problem may be that a large part of their income is already being used to pay monthly bills and debt.
Ramsey pointed to car loans, credit card balances and student loans as some of the biggest expenses taking money away from younger Americans. His argument is simple: if most of your paycheck is already going toward debt payments, you have less money left to save, invest or build wealth. This means a rising stock market does not automatically make everyone feel richer. Someone who does not own stocks may see headlines about the S&P 500 hitting records but may not personally benefit from that growth.
Stock market gains
Ramsey said the stock market is up about 13% year to date and described that as a positive development. He also said that if someone had money invested in the S&P 500, their money could have doubled over the past four years. But Ramsey argued that many younger Americans are not participating in those gains because their money is going toward monthly debt payments instead. “We are not participating in any of that because all we are doing is paying payments,” Ramsey told Fox News.
Ramsay says that the felling of being ‘boxed out’ has crept among buyers in the housing market, as buying a home becomes ever so difficult because of the steep mortgage rates. Younger generations have already accrued so much debt that whilst funding their own education, and buying cars among other things, that there is not much leeway left to own a home.
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Americans collectively hold about $1 trillion in auto debt, another $1 trillion in credit card balances and nearly $2 trillion in student loans, according to Ramsey. He said younger Americans are shouldering a significant portion of this debt, which can make it more difficult to save for a home down payment. High existing debt can also affect mortgage eligibility, as lenders consider a borrower’s outstanding obligations when determining how much they can reasonably afford to borrow.
Home buying is hard
The housing problem is not only about debt, however. Ramsey acknowledged that high home prices and mortgage rates are real affordability challenges. The median price of a single-family home is approaching $450,000, while mortgage rates are around 6.66%, according to the information cited in the Benzinga report. Those numbers can make homeownership look far away for a young person who is still paying off college loans, a car loan or credit card debt.
Ramsey believes the situation can look different for people who have fewer monthly payments. “If you don’t have any student loan debt, you don’t have any credit card debt and you don’t have a $1,200 car payment,” Ramsey told Fox News, “you can afford a house in America today with an average household income.”
Ramsey used the Midwest as an example. He said the average home there costs around $329,000. He argued that someone earning about $80,000 could potentially afford such a home if their income was not already tied up in large monthly debt payments. This is where Ramsey’s bigger point comes in: income alone does not determine whether someone feels financially secure.
Two people can earn the same salary but have very different financial situations if one has large loan payments and the other does not. A young worker earning a decent salary may still feel broke if hundreds or even thousands of dollars leave their account every month before they can save anything.
Ramsey also warned about spending money to maintain a certain lifestyle. He asked people to think about whether they would still buy something if nobody else could see it. His point was that some expensive purchases may be driven by social pressure, status or the desire to look successful rather than actual financial need.
Why Gen Z still feels broke
Ramsey specifically pointed to expensive cars as an example. “You can’t be driving a $1,400-a-month Escalade and wondering why you are broke,” he said during the Fox News interview. For Gen Z, this highlights another part of the financial pressure problem: having a high income does not necessarily mean having wealth.
Wealth comes from what a person is able to keep, save and invest after paying their expenses. If most of a paycheck goes toward debt and lifestyle costs, there may be little left to put into investments. That can create a cycle where young Americans keep working but struggle to build savings. It also explains why stock market records can feel disconnected from everyday financial life.
Why stock records still feel far away
The S&P 500 can rise, but that does not directly help someone who has no money invested in it. A young worker with $50,000 of debt may care more about their next loan payment than whether the stock market has reached another record. Ramsey’s argument is that reducing debt can free up income that can later be used to build wealth.
Once fewer dollars are going toward monthly payments, people can start putting more money into savings and investments. Investing can then become a regular part of the monthly budget instead of something people plan to start “someday.” The bigger issue for Gen Z, therefore, may not simply be whether the economy is growing or whether stocks are rising. The question is whether young Americans have enough money left after paying their bills to actually participate in that growth.
A strong stock market can create wealth for people who already own investments. But for people struggling with debt, high housing costs and expensive monthly payments, record highs may not change their daily financial reality. That is why Gen Z can watch the stock market break records and still feel broke.
Ramsey’s message is that building wealth requires more than simply earning money. It also requires controlling debt, keeping monthly expenses manageable and eventually putting spare income to work through saving and investing.
