Gordon Brown’s warning about the world “sleepwalking into a financial crisis” still resonates. He made this stark prediction back in 2018, highlighting the unresolved issues from the 2008 crash. Are we, particularly Gen Z and Millennials, any closer to addressing these problems? Or are we, perhaps even more so, sleepwalking towards a similar, or even worse, scenario?

Whether you’re working from your parents’ garage in Northampton, coworking in Melbourne, or operating from an Airbnb in Lisbon, the global economic climate affects us all. Brown’s concerns centered around a lack of global cooperation, inadequate regulation of the financial sector, and a failure to address the root causes of the previous crisis. These issues haven’t magically disappeared. 

In some ways, they’ve intensified. Global tensions are high, and while some regulations have been tightened, new forms of financial risk are constantly emerging. For example, we’ve seen increased volatility in markets and the rise of complex financial instruments that are difficult to understand, let alone regulate.

The Weight of the World on Young Shoulders

For younger generations, the challenges are compounded. Many entered the workforce during or after major economic downturns, impacting their early career trajectories and earning potential. 

Student loan debt looms large for many, a constant weight that makes saving and investing for the future a huge ask. The cost of living, particularly housing, has skyrocketed in many parts of the world, making financial independence seem like a distant dream. We can’t pretend these aren’t serious problems.

The Gig Economy and the Shift in Responsibility

We’ve also seen the rise of the “gig economy,” where job security is replaced by short-term contracts and freelance work. This can offer flexibility, but it also means unpredictable income and often a lack of benefits like health insurance or retirement plans. 

This shift places the onus of financial planning squarely on the individual, requiring a level of financial literacy that many young people simply haven’t had the chance to develop. It’s not their fault. Financial education isn’t always prioritised in schools or at home.

For many, the flexibility also morphs into something far from what they were promised. This is what we’re starting to hear a lot from the digital nomad community, where the image of working from a beach in Bali or a café in Buenos Aires dominates. These ideas are certainly appealing, and they’re heavily promoted. But the reality can be quite different.  

Many digital nomads find themselves constantly chasing work, dealing with unreliable internet connections, and struggling to build a stable financial foundation. The “travel” aspect often becomes secondary, as the need to earn a living takes precedence. And while working in a low cost of living country might seem like a great way to save money, it also opens up the door to exploitation.  

Western companies can leverage the fact that someone is willing to work for lower rates because they’re living somewhere cheaper, effectively depressing wages and creating a race to the bottom. The shiny mirage of the digital nomad lifestyle can quickly fade when faced with the challenges of inconsistent income, a lack of social safety nets, and the realization that you’re working your way around the world while barely experiencing any of the cultures you visit.

Digital Dangers and the Culture of Consumption

The digital age, while offering amazing opportunities, also presents new financial risks. Online scams, cryptocurrency volatility, and the ease of accumulating debt through online shopping are just a few of the challenges younger generations face. We’re constantly bombarded with messages encouraging consumption, often on credit, which can make it difficult to build a solid financial foundation. We don’t have apex predators to face off against anymore, but these digital dangers can be just as deadly.

Ironically, despite being considered “digital natives,” Gen Z have been found time and time again to be the most susceptible to online scams. Their constant online presence and familiarity with social media make them prime targets for sophisticated phishing schemes, fake investment opportunities, and identity theft. 

Scammers exploit the trust that younger generations often place in online platforms and influencers, making it harder to distinguish between legitimate offers and fraudulent activity. The speed and anonymity of the internet also make it difficult to track down scammers and recover lost funds. This vulnerability, coupled with the constant pressure to keep up with trends and the ease of making online purchases, creates a perfect storm for financial exploitation.

Information Overload and the Illusion of Intelligence

Some might argue that younger generations are more financially savvy than previous ones, with access to information and investment platforms at their fingertips. This is partially true. There are many resources available online for learning about personal finance. However, access to information doesn’t necessarily translate into financial well-being. 

It’s easy to get lost in the sea of advice, some of it good, some of it not so good. And even with the best information, making sound financial decisions requires discipline, patience, and a long-term perspective—qualities that can be difficult to cultivate in a culture of instant gratification.

The Psychology of Uncertainty

We also have to acknowledge the psychological impact of constant economic uncertainty. The feeling that the future is uncertain can lead to short-term thinking and a reluctance to make long-term financial plans. Why save for retirement when you’re not even sure what the world will look like in five years? This kind of thinking, while understandable, can have serious consequences down the road.

If you pay even a small amount of attention to social media trends, you’ll have noticed a rejection of minimalism, which has been replaced by quick consumption and an obsession with rapidly changing trends. When the future feels unstable, the focus shifts to the present moment. Delayed gratification seems less appealing, and the desire for immediate rewards and experiences takes over. 

This can lead to a cycle of constantly chasing the latest trends, whether it’s fashion, technology, or travel. The pressure to keep up can be financially draining, and it reinforces a short-term perspective that makes it difficult to build long-term wealth. 

Why invest in a stable, classic wardrobe when trends change every few months? Why save for a down payment on a house when the housing market is so volatile? This nihilistic mindset, while a natural response to uncertainty, can create a significant obstacle to financial security.

A Wake-Up Call for Change

So, are Gen Z and Millennials sleepwalking into a financial crisis? It’s not a simple question to answer. There are certainly worrying trends, but there are also signs of resilience and innovation. 

What’s clear is that we need to do more to equip younger generations with the knowledge, skills, and support they need to achieve financial security. This means better financial education, more responsible lending practices, and a focus on building a more equitable and sustainable economy. It’s a big ask, but it’s one we simply can’t afford to ignore. We need to wake up before it’s too late.