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Millennials, Gen Zers say pandemic has derailed their financial independence

The coronavirus pandemic has abruptly upended Aidan Curran’s life this summer.

In early July, the 24-year-old got laid off from his job as an associate at a public relations firm in Washington, D.C. Before he lost his position, he was temporarily staying with his parents in Cape Cod because his office wasn’t going to reopen until Labor Day. But now he’s stuck paying nearly $1,400 in rent each month for an apartment he’s not living in. And his lease isn’t up until January.

He hasn’t received any money from unemployment over the past month, and still hasn’t gotten a stimulus check from the spring.

“It’s been an absolute nightmare,” says Curran, who had plans to attend law school but put those dreams on hold. “I keep applying for jobs, but have yet to get an interview. It’s tough to find a job that doesn’t already have a ton of applicants.”

Curran, like millions of other Americans, is facing an uncertain future as policymakers in Washington remain at odds over another stimulus package after the additional $600 in weekly unemployment benefits expired in July.

“It’s unfortunate that both Republicans and Democrats can’t come to a solution to help people like me,” says Curran, who is paying off student debt from his undergraduate degree. “The failure to get any unemployment because of the dilapidated and antiquated unemployment system has been a mess. I could really use that extra $600 right now.”

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The coronavirus pandemic has created a new set of financial obstacles for young millennials and Gen Zers. Most are unsure how their generations can navigate through the worst global economic crisis since the 1930s.

About 59% of young Americans say the pandemic has derailed their goal of becoming financially independent from family or other support, according to a new report by The Harris Poll on behalf of TD Ameritrade.

“Even before the economic downturn, young Americans generally had anxiety about their finances due to stagnant wages, the rising cost of living and debt burdens. Now that’s been exacerbated by the pandemic,” says Keith Denerstein, director of investment products and guidance at TD Ameritrade. “But there’s no shame in turning to your parents or family for additional support.”

Even though nine in 10 Americans say that they and their parents want them to be financially independent, more than two thirds expressed anxiety about the pandemic’s effect on their finances. And 63% were concerned they may lose their job.

The study, which was given exclusively to USA TODAY, surveyed 2,002 Americans ages 15 to 29. They were polled on Feb. 20 to March 4, before the World Health Organization declared a pandemic, and then again in April once the shutdown was underway.

Some are worried about future stimulus

Lawmakers in Washington are working on a fifth round of stimulus relief, with Democrats and Republicans struggling to come to an agreement as vital lifelines like enhanced unemployment benefits and rent moratoriums come to a halt, leaving out-of-work Americans in limbo. Both parties included another round of $1,200 stimulus checks in their proposals.

About 71% of young Americans are worried about their generations’ ability to survive the financial downturn without government support, the data showed.

“For those who have had their income disputed through the termination of their employment, they have leaned on government stimulus to insure that their finances are close to where they were prior to the pandemic,” says Denerstein. “And they are using the stimulus money in the way we’d hope them to, whether that’s contributing to their savings, paying down debt or using it to cover their living expenses.”

Before COVID-19, many were dependent on parents

To be sure, many young Americans were dependent on their family before the recession, the TD Ameritrade data shows. Just before the pandemic began, the first survey found half of young Americans still received financial assistance from their parents, grandparents or others by the time they turned 30, while the other half were already self-sufficient at that age.

About 1 in 4 still rely on their parents to cover their entire rent check. About 58% say their parents pay for all or a portion of their cell phones, and more than half pay for their insurance.

Young millennials in particular feel that the odds are against them, crippled by rising living costs and student loan debt. About 82% said their salary levels have remained the same while the cost of living rises, making it difficult to achieve financial independence. And about 42% say their student debt alone makes them think they’ll never be independent.

Young Americans still prioritize retirement

While some have shifted their investment strategies, the majority remain committed to retirement plans. And many have turned to investing to increase their net worth at an early age.

Following the economic downturn, about 40% have already put more money into savings and 35% started a side hustle for more income. Nearly a quarter bought investments, while 18% stopped investing in the stock market. About 31% moved back in with their parents.

Emily Parlapiano, 30, is one of those young Americans who used her stimulus check to get ahead on her retirement goals.

During her early 20s, she wasn’t maxing out her 401(k) account because of her student debt. To get her finances on track, she used the “avalanche method” to pay off her student loans, tackling the ones with the highest interest rates first. After she paid off her loans within four years, she upped her retirement contributions.

When the pandemic hit, Parlapiano was fortunate to have job security and put her $1,200 stimulus money toward maxing out her Roth IRA. She also recently moved in with her significant other, saving her $200 a month. Now she’s padding her emergency fund and stashing money away for a down payment on a future home.

“You have to stay steady, hopeful and positive. If you go into the doom and gloom phase, it’s hard to get out of that mindset,” says Parlapiano, who’s employed at a small, nonprofit advisory firm that works with fortune 500 companies on their social impact strategies. “Now I want to throw as much money as I can in my retirement accounts. This isn’t about the next three to five years. This is long-term investing.”

This article originally appeared on USA TODAY: Coronavirus stimulus: Millennials, Gen Z say pandemic hurt finances