Consumer confidence, career myths, and the reality of rising student loans

On paper, the U.S. economy looks surprisingly strong: unemployment is low, GDP is solid, companies are still hiring, and AI investment is booming. But if you talk to actual people, the mood is very different. Everything feels expensive, student loan bills are back (and in some cases bigger than before), and a lot of workers—especially Gen Z—are rethinking what they’re willing to sacrifice for a paycheck.

Let’s break down what’s really going on: why the data looks good but you feel stressed, how career advice like “follow your passion” can backfire, and what’s changing with student loans and interest rates that could affect your money over the next few years.

Why the economy looks strong but feels terrible

Economists see an economy that’s still growing. Job gains are slower than they were at the peak of the post‑pandemic boom, but they’re still above the level needed to keep up with population growth. Wages are rising, and inflation (the rate of price increases) has cooled from its worst levels.

So why does it feel so bad?

Because you don’t live in averages—you live in your monthly cash flow. And several big categories of everyday life have become painfully unaffordable all at once:

• Housing: Mortgage rates have jumped from the 3% range to around 7%+ in just a few years. That has locked many current homeowners in place and pushed first-time homeownership out of reach for a lot of renters.

• Student loans: After a long pandemic pause, payments are back. On top of that, some borrowers are seeing higher monthly bills under new repayment structures.

• Everyday costs: Health care, education, insurance, and even a simple night out (think bowling or a family trip to an arcade/restaurant) are all far more expensive than they used to be.

So you get this strange split: the macro story (“the economy”) looks fine, but the personal story (“my budget”) feels squeezed. That disconnect shows up clearly in consumer confidence surveys: people say they’re worried and pessimistic, even as spending has held up better than you’d expect.

Where consumers are pulling back—and where they’re not

When money feels tight, people don’t usually cut everything equally. They prioritize. You can see that in how spending has shifted:

• Discretionary fun is getting cut first. Places like bowling alleys, entertainment chains, and mid‑priced nights out are often the first to go. What used to be a $20 evening can easily turn into $150–$200 for a family once you add food, games, and fees.

• Value and essentials are holding up better. Warehouse clubs and discount retailers are still doing solid business because people are trading down—buying store brands, bulk items, and focusing on needs instead of wants.

• Big durable purchases are slowing. High interest rates make it harder to justify a new car or major home project. Those are easy to delay if your budget is tight.

If you’re feeling this in your own budget, you’re not alone—and it doesn’t mean you’re bad with money. It means the financial environment changed faster than most people’s incomes did.

High rates and what they mean for your long-term money

One of the most important shifts for your finances right now is the expectation that interest rates may stay higher for longer. For years, we lived in a world where money was basically free: very low mortgage rates, very low bond yields, and very little return on safe savings. That’s changed.

Today, we have:

• Higher borrowing costs: Mortgages, car loans, and other types of debt are more expensive. That makes big purchases harder and debt mistakes more painful.

• Better yields on safe assets: High‑quality bonds and even some savings accounts and CDs are finally paying meaningful interest again. For long‑term investors, that’s actually a positive.

If you’re investing for retirement or other long‑term goals, this has a few practical implications:

• Don’t ignore fixed income. For a long time, bonds were an afterthought because yields were so low. Now, high‑quality bonds and bond funds can play a more attractive role in a diversified portfolio.

• Be careful with long-term bonds. Long‑maturity bonds (like 30‑year or 100‑year debt) can lose a lot of value when rates rise. If you want stability, focus on shorter‑term, high‑quality options.

• Cash finally matters—but it’s not enough. Earning 4–5% on cash feels great after years of near‑zero yields, but cash alone won’t keep up with inflation over decades. It’s a tool, not a full plan.

AI, your money, and faster financial decisions

AI isn’t just about robots and coding jobs. It’s starting to show up in personal finance in ways that could change behavior quickly—for better or worse.

Imagine a digital assistant that sees your checking account earning 0.01% and automatically moves extra cash into a 4–5% savings or money market account. Or one that cancels subscriptions the moment you stop using them. That kind of automation could help people earn more on their cash and waste less money.

But there’s a flip side: if money can move faster and easier, the entire financial system can become more volatile. Bank deposits, investments, and even your own spending could shift more rapidly than before. The key is to stay in control—use AI tools to support your goals, not to make impulse decisions for you.

If you want to think more intentionally about using technology to help your finances instead of hurt them, I’ve written about how to build a simple “digital brain” for your money in this guide to using AI to actually make you money.

Gen Z, work, and the pushback against “postpone joy”

One of the most interesting parts of the conversation in the transcript is about Gen Z and work. A lot of older managers are frustrated and confused by younger workers who don’t seem willing to “pay their dues” the way previous generations did.

But if you look at what Gen Z is reacting to, it makes sense:

• They grew up through 9/11, the Great Recession, a pandemic, and now an affordability crisis.

• They’ve watched older generations follow the traditional path—work hard, delay joy, retire at 65—only to face layoffs, health issues, or market crashes.

• They’re being asked to take on huge student debt for degrees that don’t always lead to stable, well‑paying jobs.

So many have decided: I’m not willing to postpone joy and well‑being for decades on a promise that may not pay off.

Research on values suggests a real shift. For many in Gen Z, the top priorities are:

• Self‑care and well‑being (not burning out for work)

• Agency (having control over decisions, schedule, and path)

• Voice and authenticity (being able to show up as themselves)

That doesn’t mean Gen Z is lazy or “unemployable.” It means they’re optimizing for a different equation: they want work that fits into a life they actually want to live, not a life that’s built entirely around work.

Why “follow your passion” can be terrible career advice

One of the strongest critiques in the transcript is of a piece of advice that’s been repeated for years: “Follow your passion.” It sounds inspiring, but on its own, it can be dangerous.

When you’re building a sustainable career, you’re really balancing three things:

• Your values: What matters most to you? Security, freedom, creativity, impact, status, flexibility, income?

• Your aptitudes: What are you actually good at—or capable of becoming very good at with practice?

• Your interests/passions: What do you enjoy enough to stick with when it gets hard or boring?

“Follow your passion” only looks at the third leg of the stool. If you build a career only around what sounds exciting, but:

• There’s no real market demand, or

• You’re not particularly strong at it, or

• It conflicts with your deeper values (for example, you value stability but chase a wildly unstable path),

you can end up burned out, underpaid, or stuck.

A healthier approach is: follow the intersection of your values, strengths, and interests. That might not sound as romantic as “follow your passion,” but it’s far more likely to give you both a decent income and a life you actually like.

Student loans: why some payments are suddenly bigger

Now let’s talk about one of the biggest financial stressors in the transcript: student loans. After a long payment pause during the pandemic, bills are back. But for many borrowers, the surprise isn’t just that payments resumed—it’s that some payments are higher than before.

There are a few reasons this is happening:

• New repayment plans: Recent changes created new income‑driven repayment options and restructured older ones. Some borrowers are choosing plans that front‑load higher payments so they can pay off faster and save on interest overall.

• Capitalized interest: Pauses, forbearances, and switching plans can sometimes cause unpaid interest to be added to your principal, making your balance (and therefore your payment) bigger.

• Borrowing has grown: The average amount of student debt is much higher than it was 10–20 years ago, especially for those who went to graduate school. So even “normal” payments can feel huge.

Some borrowers are choosing higher payments on purpose—because they want to get out of debt faster and they can afford it. Others feel like they don’t have great options: lower payments would stretch the loan out for decades and cost far more in interest, but higher payments strain their monthly budget.

If you’re in this situation, it’s essential to get really clear on your options rather than just accepting whatever bill shows up. That includes understanding the different income‑driven repayment plans, possible forgiveness paths, and key deadlines. I walk through some of those details in this guide to student loan deadlines and how to lower your rate.

Student loans vs. everything else in your debt picture

When you zoom out, student loans are now roughly on par with auto loans in the overall household debt mix—behind mortgages, but still massive. The challenge is that student debt often hits right when you’re trying to do other big life things:

• Move out on your own

• Build an emergency fund

• Save for retirement

• Maybe buy a home or start a family

Juggling all of that with a large monthly student loan bill is tough. The key is to be intentional about trade‑offs instead of trying to do everything at once.

For example:

• If your interest rate is relatively low and you’re on a stable path, it might make sense to prioritize retirement savings up to a match and a solid emergency fund, while paying your loans on a standard or income‑driven plan.

• If your interest rate is high and you don’t expect forgiveness, you may choose to aggressively pay down loans before taking on a mortgage or other big commitments.

Housing and the new reality of 7% mortgages

One chart mentioned in the conversation shows just how shocking the jump in mortgage rates has been. We went from historically low 30‑year rates around 3% to levels more than double that in a short period of time.

Even if you’re not actively shopping for a home, this matters to you because:

• It shapes rents. Fewer people can afford to buy, so they stay in the rental market longer, which can push rents up.

• It locks in existing homeowners. People with 3% mortgages are reluctant to move and take on a 7% loan, which reduces housing supply.

• It changes what “normal” looks like. What felt like a temporary spike is starting to look more like a new baseline.

If you’re a potential first‑time buyer, this is frustrating. It may mean:

• Extending your renting years while you build savings

• Considering smaller homes, different neighborhoods, or multi‑family properties

• Re‑running the math on what “affordable” really means given your income and other debts

So what can you actually do right now?

When the big picture feels chaotic, I like to bring it back to a few simple, practical moves you can control:

1. Get brutally clear on your cash flow

List your income, fixed expenses (rent/mortgage, minimum debt payments, insurance, utilities), and variable spending. With higher rates and prices, guessing is dangerous. You need real numbers.

2. Prioritize high‑impact changes

Look for changes that move the needle:

• Refinancing or restructuring high‑interest debt where possible

• Switching to a more appropriate student loan repayment plan

• Cutting or downgrading big recurring costs (housing, transportation, insurance) before obsessing over tiny line items

3. Take advantage of higher yields—thoughtfully

Make sure your emergency fund and short‑term savings are earning a competitive rate in a high‑yield savings account, CD, or money market fund. For long‑term money, revisit your mix of stocks and bonds now that bonds actually pay something again.

4. Build a career that balances money and meaning

Instead of chasing a vague “passion,” focus on the intersection of:

• Your values (what you want your life to look and feel like)

• Your strengths (what you can become excellent at)

• Real opportunities (where people actually pay for those strengths)

If you’re Gen Z—or just rethinking your relationship with work—you’re not wrong to want joy and well‑being now, not just at 65. The trick is to design a path that supports that desire financially instead of fighting it.

Final thoughts

The story the numbers tell and the story your bank account tells don’t always match. Right now, the official data says the economy is okay, even strong in some areas. But many households are feeling real pressure from student loans, housing costs, and the rising price of simply existing.

You can’t fix interest rates or rewrite federal policy on your own—but you can respond strategically. Understand what’s changing, make deliberate trade‑offs, and use the tools available to you (including technology) to tilt the game a bit more in your favor.

And if you’re sitting with a big student loan balance, wondering if the degree was worth it, you’re not alone there either. I dig into that question in more detail in another piece: was a $120,000 college degree really a huge mistake? It’s complicated—but there are ways to move forward from where you are today.