With record-high inflation and salaries failing to keep up, many young people are concerned about how their purchases will impact their debt levels. Both Millennials and Gen Z have been affected by economic factors that they’ve had little control over, and it’s made them gun-shy about taking big financial risks. As Gen Z becomes of age and moves into the workforce, there are certain big purchases they’re leery of buying. Here are the top categories those surveyed have reported avoiding and why.

Buying a home or leveraging home equity

The cost of a home has continued to rise, adding thousands of dollars to the median debt load for those aged 25 to 34. Even if they get a good deal on a property, they may be stuck with high payments if interest rates go up or the economy cools off.

Those Gen Z-ers who own a home aren’t taking on as much risk as their elders. The amount of home equity debt consolidation loans has begun to see a drop-off as young homeowners are worried that leveraging their equity for home improvement, or any other type of loan, won’t be worth the risk until economic conditions improve.

Taking out a large loan

Many people are hesitant to take on a large loan due to the current recession and the uncertainty it’s causing in the job market. They may also be unwilling to take on more debt if things start going south, and it’s starting to show in financial trends.

Buying a car

The average car loan has increased by more than 50% in the last five years. This can be a real challenge for those trying to get their finances back on track and pay off other debts. Car loans can quickly become a debt that’s difficult to pay back, especially if interest rates go up.

Instead, many younger people in the workforce are seeking remote work or starting their own businesses. This allows them to maintain control of their income and avoid the costs associated with car ownership altogether. For those who are unable to find remote work or are uninterested in entrepreneurship, public transit has become the primary option for everyday commutes, supplemented with ridesharing apps.

Taking an extensive vacation

Gen Z-ers are less likely to take “big” vacations due to the rising costs associated with travel, fewer vacation days at their jobs, and the fact that they may not have enough saved up to cover the expenses. They’re also more likely to take shorter vacations or vacations that are cheaper and closer to home.

Saving for retirement

Many of those in the Gen Z demographic have reported an unwillingness to prioritize saving for retirement instead of spending their money in the present. This could pose a problem in the future, as this generation is expected to have significantly more responsibilities than their predecessors. However, due to the rising cost of living, many simply see retirement savings as a luxury they can’t afford.

The bottom line

It’s clear that Gen Z-ers are struggling with a myriad of financial issues. While they may not be as financially flexible as their predecessors, there are many things they can do to prepare for the future without taking on debt. However, providing them with the financial education they need to make sound decisions is essential for giving them a better chance at flourishing.