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When it comes to building wealth, each generation is on a slightly different trajectory, shaped by a changing economy, digital advances, and shifting cultural norms. The youngest and newest working Americans—Generation Z—are just beginning to make their mark and grow their own net worths.

Average net worth of Generation Z

Generation Z, or Gen Z, is made up of individuals born between 1997 and 2012. The oldest members of this generation are turning 25, and are actively participating in the workforce, becoming homeowners, starting families, and launching their own businesses. The youngest members of this generation are just 10 years old.

Most Gen Zers are still at the very start of their wealth-building journey, due in part to the fact that many have still not joined the workforce, and those who are working have not yet entered their prime earning years.

According to the Federal Reserve’s 2019 Survey of Consumer Finances, Americans under age 35 (a mix of millennials and Gen Zers) have an average net worth of $76,000.

How does Gen Z’s net worth compare to other generations?

Compared to older generations, the average Gen Zer’s net worth falls short. The average millennial over age 35 stands at over $400,000. Those in Generation X have average net worths between $400,000 and $833,000, and older generations including Baby Boomers and the Silent Generation have average net worths that creep into the millions.

It’s not a surprise that Gen Z has the lowest average net worth of all the generations since there’s only a small number of them in the workforce, and entry-level jobs usually have lower salaries. Lower earnings have translated to lower savings and investment contributions. A recent report released by Deloitte found that 46% of Gen Zers are living paycheck-to-paycheck and over a quarter of Gen Zers are not confident that they will be able to retire comfortably. The typical annual salary for Generation Z workers varies from state to state, but the average across all states was $32,500 in 2021, according to recent research by GoBankingRates.

“For many people, the twenties are the time in their life when they are starting their professional lives and possibly a new career. Their earning potential may be somewhat limited, which might make it seem difficult to build net worth during this decade,” says Paul Deer, a certified financial planner at Personal Capital.

Investing has also been put on the backburner by many in this generation. Nearly 40% have no investments, and the top reasons for not investing include having no additional funds to spare (44%), not knowing where to start (31%) and feeling investing is too risky (23%), according to a Bank of America Survey. The same survey found that while some Gen Zers are prioritizing homeownership, which is often touted as a key way to build net worth, the majority are holding off on becoming homeowners due to surging home prices and rising everyday costs.

What has shaped Gen Z’s net worth and financial future?

Several factors have played a role in this generation’s ability to build and grow their net worths. A combination of economic downturns, record-breaking inflation, rising educational costs, and stagnant wages have all created significant barriers to building wealth.

Gen Z is still new to the workforce

Many Gen Zers are younger: half of this generation are still under the age of 18, two-thirds are still of school or college-age, and just a quarter of Gen Zers are of working age. Even for those participating in the workforce, they’re likely still gaining their footing when it comes to their professional careers and earning entry-level salaries.

“Millennial and Gen Z are earlier in the earning, saving, and accumulating phase,” says Richard Bertain, a Pasadena-based financial advisor for UBS. “Savings seems to be spotty and the habit of saving, in many instances, hasn’t become a habit yet.”

The Great Recession set the tone for Gen Z’s money management

While the oldest Gen Zers were just pre-teens during the 2007-2009 recession, many still remember watching older siblings struggle to find jobs while paying off big student loans. As a result, studies show that even though Gen Zers are saving less for retirement compared to older generations, they are saving a larger portion of their income. Gen Z sets aside a median 20% of their income for retirement, compared to a median 15% contribution from millennials.

Still, when it comes to setting financial goals, working Gen Zers who are not yet married and haven’t started families tend to prioritize more immediate goals like paying down credit cards, student loans, and building their emergency funds over saving for retirement.

Gen Z has more student loan debt than previous generations

According to a Department of Education analysis, the cumulative federal student loan debt stands at $1.6 trillion and rising for more than 45 million borrowers. Gen Zers have, on average, $20,900 in student debt—that’s 13% more than millennials, according to the Fed. And 7.7% of Gen Zers have balances over $50,000.

As a result, some Gen Zers have put off major milestones like purchasing a home, starting a family, or investing for retirement. Certain measures like the one-time student loan forgiveness program have given Gen Zers hope that they’ll have more available income to fund future financial milestones, but not all student loan borrowers will benefit from this program and some Gen Zers have balances that far exceed the maximum forgiveness amount.

The COVID-19 pandemic is expected to have long-term effects on this generation

For many Gen Zers, the pandemic ushered in the second major economic crisis in their lifetimes, one that is still wreaking havoc on their personal finances and the full effects of which are yet to be seen. One report by Georgetown University found that 25% of Gen Z adults (ages 18-23), who were already lacking in savings pre-pandemic, reported having either spent their savings or delayed saving or paying off debt since the pandemic hit.

3 ways Gen Zers can build their net worth

The good news: Gen Zers have time on their side. And building and maintaining a strong net worth is all about making positive financial choices now that will pay off later on. A few ways to get on track:

1. Prioritize paying down debt and saving: High debt balances, and especially high-interest debt, can get in the way of achieving other financial goals. Experts say building good savings habits early and continuing to implement those as you age and earn more money can make all the difference.

“It can be easy for higher earnings to get swallowed up in mortgage and car payments, child-rearing expenses, and splurging on a few luxuries like nice vacations and fancy dinners. Instead, it’s important to maintain the saving and investing disciplines that were established in the previous decade and even increase the percentage of income saved, if possible,” says Deer.

2. Entrepreneurship: Starting your own business can be a key wealth-driver, and some Gen Zers have already taken note. A combination of 9-to-5 fatigue, unparalleled social media skills, and an increased sense of social awareness are driving Gen Zers to ditch traditional corporate work environments for their own start-ups. A 2022 survey by Microsoft found that more than 60% of Gen Zers have started—or intend to start—their own business.

3. Investing early: Some experts recommend setting aside anywhere from 15%-25% of your after-tax income for investing, although this could look a little different for everyone. However, the earlier you start investing, even if it’s only a few dollars, the more time your money has to grow and work for you thanks to compound interest.

“The key is establishing good financial habits and disciplines that will help you build net worth over the rest of your life,” says Deer.

EDITORIAL DISCLOSURE: The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends?editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.