José Alonso Hernández works two jobs to make ends meet in San Juan, Puerto Rico while his partner, who just graduated, covers the major portion of their expenses.

 He primarily works at the Museum of Puerto Rican History for $10 per hour–three dollars above the official minimum wage–and is currently a Fellow for Hunter College of City University of New York.

The 26-year-old is a graduate student at the University of Puerto Rico studying Puerto Rican and Caribbean History and splits living expenses with his partner, who completed her master’s degree and works a full-time job. 

“She has her post-grad employment and is the main breadwinner, as people say […] I earn a fraction of her salary,” he said. 

But they are having trouble keeping up with rising expenses as inflation slowly cools down. José and his partner are typical Generation Z, adults between the ages of 18-25, who are entering the workforce for the first time in their lives and have limited financial experience. However, Gen Z may have had an advantage over Millennials during the Financial Crisis of 2008.

“Inflation affects everyone, it reduces purchasing power,” said Sam Bullard, managing director, and senior economist at Wells Fargo. 

Inflation is slowing after this year’s inflation rate hikes, but a return to pre-pandemic levels will take a while.  

“We’re anticipating headline inflation to continue to moderate in the coming quarters, but the pace will still be painfully slow for policymakers, consumers and business owners in particular,” said Bullard. 

Numbers are still well above the Federal Reserve’s 2% target, so policymakers will need to continue tightening monetary policy through higher interest rates.

“We’re anticipating a 50 basis point rate hike in December and project the Fed to raise interest rates by another 50 points in January,” said Bullard. 

Unlike Millenials, a generation born in the late 1980’s and early 1990’s, Gen Z may have an advantage on their side if a recession comes into play in 2023. Despite their finances, they may have better ammunition to survive a tighter economy.

Economists understand that the potential incoming recession will not be as deep as the Great Recession because consumers now have “more ammunition, more savings built up”, because of stimilus dollars recieved during the pandemic. 

“As we go into this recession, consumers are in a much better position,” said Bullard. 

Gen Z is entering the workforce for the first time post-graduation or is still in school. As the economy continues to face pressures, here are three suggestions Gen-Z consumers could apply to their finances and weather inflation this Winter season: 

1. Leave Room for Negotiations.

It may seem daunting for a generation that has never made big purchases like a new car or a mortgage. However, Andres Lares, managing partner at Shapiro Negotiations Institute in Baltimore said that, as customers, they need to let go of the fear of asking for too little or too much.

“An underrated piece for this generation is to come with confidence to these conversations,” said Lares.

He suggested thinking of precedents before going into a negotiation; don’t just ask what a car costs, come with the knowledge of what the same car goes for in a different dealership, and leverage the conversation. 

The same thought process can be applied to negotiating monthly rent with landlords.

“If you are renewing your lease, this is a great opportunity to say other apartments across the country the rates are going down,” said Ekenna Anya-Gafu, Chief Financial Officer at Bay Street Capital Holdings. 

2.  Budget realistically and stick to it! 

José Alonso’s partner assumes bigger expenses in their shared unit. He covers 33% of their $600 monthly rent, pays the monthly water bill, and helps out with weekly groceries. 

Food costs on the island are impacting everybody’s pockets. He immediately spends between $50-60 on merely 10 items, barely enough food to last a week. 

With food costs still high, Ekenna Anya-Gafu suggests meal-prepping or buying food in bulk to stretch the dollar. 

Businesses won’t reduce prices as long as they continue to experience strong demand for goods and services, subsequently keeping inflation high.

“Young people tend to go out, and have experiences, go on trips, and go out to eat. We’re seeing strong demand in these areas and strong price increases as a result,” said Sam Bullard.

Maintain an established budget and keep track of your finances. Experts suggest that consumers who are savvy about their daily expenses are more likely to meet their benchmarks. 

3. Make sure to either finance current debt, save, or both. 

Emelia Vero is a 25-year-old special education teacher and resident of The Bronx, New York. Vero lives in a four-bedroom house with her mother and her partner. 

She covers the electricity bill as her contribution to household expenses, while the rest of her paycheck goes into her car and financing her music equipment. 

“A lot of my coworkers are mothers and I don’t know how they do it,” she said. She may need to get a second now because her bank account just “goes right back to zero.” 

As the economy faces a potential recession in 2024, consumers must prioritize either saving money or paying off debt, rather than incur additional expenses. 

“Rather than growing your debt, you’re lowering the total amount of debt. Find a reputable organization to help consolidate your debt, but once it's done, don’t increase your spending habits,” said Lares. 

When it comes to credit card debt, take a look at your interest rate. With the Federal Reserve’s historic interest rate hikes, credit cards may have subtly raised their APR  from 18% to 25%. 

Take a look at the statement from January and compare the annual fee to where it’s currently standing. Ask the credit card company to see if they will weigh the fee to last year’s APR.