Overcoming the Quarter-Life Crisis with Confidence

The financial struggle is real for today’s young adults. Housing and car ownership are increasingly unaffordable, grocery prices just keep rising, and student loan debt remains a burden for many. It’s little wonder that as many as three-quarters of young adults experience what is colloquially known as a “quarter-life crisis.”

What’s worse, social media can make those who are struggling feel like everyone else is thriving while they’re falling behind, causing them to question their relationships, their career paths, and even their purpose in life. But that perception of falling behind is often inaccurate—and even when it isn’t, it doesn’t have to define your reality or stop you from catching up.

Sometimes a quarter-life crisis might require serious reflection and even counseling. Yet often a simple reframing of the situation and concrete steps to improve your situation go a long way. Below are some tips from experts on how to shift your mindset and improve your finances.

‘Take a Deep Breath and a Step Back’

It’s important for Gen Z to recognize that they’re just getting started in life, and there’s plenty of time to catch up. Today’s challenging economic circumstances won’t necessarily last forever.

“My biggest advice to Gen Z is when/if you start to become overwhelmed, entering a quarter life crisis, take a deep breath and a step back,” Marnie Bonner, a Gen Z associate financial planner at Wealthchoice, told Investopedia. The key to taking stock effectively, she added, is focusing on yourself rather than what other people appear to have, accepting that it’s okay to feel overwhelmed, and recognizing that it’s never too late to change things.

The Goal Isn’t to Look Rich at 25

Seeing people your age on social media living their best life can make you feel like you’re not measuring up. But your life is just getting started and you should consider playing a different game entirely, according to Ryan Greiser, a financial planner specialized in helping millennials plan and invest.

“Social pressure drives quarter-life crisis because everyone’s competing in the wrong competition,” Greiser said. “The goal isn’t to look rich at 25—it’s to retire a decade or two before your peers. Live below your means, invest the difference in index funds, and let compound interest work while your friends are still making car payments.”

Save

Many young adults report a lack of financial independence as a key source of stress. Often, this can be fixed by paying off debt and saving.

“Start saving and start paying down any debt,” Bonner said. “The easiest way to do this is by setting up auto-savings from your paycheck and designating a specific portion to go directly into your savings accounts. If you don’t see the money, you are less likely to spend it.”

Data, Systems, and Growing Income

Confronting the details of your finances is a key first step to getting past anxiety, according to financial advisor David Gibson. “Clarity is the antidote to financial anxiety,” Gibson said. “Use an app or spreadsheet to track your money. Be brutally honest but not hard on yourself.”

Greiser agrees that automating savings before you can spend it is important. That’s one of his three systems to cure financial anxiety. The other two are “tracking every dollar for 30 days to see where money actually goes,” and “investing heavily in developing skills that command higher pay.”

In terms of careers, a topic of angst for many young adults, Greiser discourages chasing purposes and passion. “The most successful people find what they’re good at, solve problems with that skillset, and get paid well to do it,” he said. “When you align those three things, purpose follows naturally.”

The Bottom Line

Quarter-life crises are often triggered by financial worries and distorted perceptions of how other people are living. Sometimes, a lot of this pain can go away by familiarizing yourself with your finances, finding ways to pay off debt and save more, maximizing income opportunities, and recognizing that your peers aren’t as well off and successful as their social media posts portray. It’s also important to realize that when you’re in your 20s, you’re just starting out in life. Sometimes it takes time to gain some traction.