5 reasons for Gen Zers with money problems to be hopeful, according to Dave Ramsey

• Inflation, higher interest rates, layoffs, and other challenges have hit Gen Z's finances.
• Dave Ramsey gave five reasons for young people to feel hopeful on the "Modern Wisdom" podcast.
• The radio personality pointed to economic change, earnings growth, and wealth compounding over time.

Gen Zers have had their finances walloped by a pandemic, historic inflation, soaring interest rates, and widespread layoffs in recent years — and could face more pain if President Donald Trump's trade war drives up prices and drags the economy into recession.

Yet most young people will be fine in the long run if they work hard and manage their money wisely, Dave Ramsey told the "Modern Wisdom" podcast in an episode released on Thursday.

The host of "The Ramsey Show" said America's youth should feel optimistic about their financial futures for these five reasons:

1. Now isn't forever

Ramsay said that if someone had taken a snapshot of him when he filed for bankruptcy at age 28 with two kids, his financial situation would have seemed hopeless. But that would miss how he eventually turned his life around and built a successful career as a radio personality.

"Life is a film strip," the personal finance guru said. "It's a series of snapshots strung together."

Ramsey underscored that factors such as house prices, interest rates, and the speed of wage growth change over time.

"So, bottom line is if you're in your 20s, and houses are too expensive because interest rates are 6%, and your wages haven't kept up with what the boomer curve was — which are all accurate mathematical statements — you'll be OK," he said. "When you're 30, it's going to be different."

2. Earnings go up

The vast majority of young people will earn higher incomes in the future as they gain experience and climb their career ladders, Ramsey said. That can help them to pay off their debts, afford homes, and build the lives they want.

Ramsey asked rhetorically whether "at the apex of my life, when I'm at my maximum earning potential, am I making less than I did when I was 22 years old and I just got out of school?"

"No," he continued, adding that the number of people for whom that's true is "almost zero — you can't find them."

3. The power of compounding

Diligently saving and investing for decades is a powerful way to build long-term wealth and escape money troubles, Ramsey said.

For example, investing 15% of a household income of $70,000 a year, or about $10,500 a year, into a 401(k) for 40 years would yield $2.1 million, assuming an average annual return of 7%.

Ramsey emphasized that kind of calculation is likely conservative as it assumes "a guy never got a raise" over the entire time period.

4. Personal agency

Even if national wage growth is lagging inflation, individuals can buck that trend through hard work, Ramsey said.

People can "personally outpace the fact that wages haven't kept up," he said. "So go do that — that's your thing."

On a related note, Ramsey recalled his children once complaining to him that something wasn't fair.

"I'm like, fair is where the Tilt-a-Whirl and the cotton candy is, kid," he said. "You want some fair, go get some."

Ramsey hailed his Gen Z employees for their hustle: "They'll charge the gates of hell with a water pistol."

On the other hand, he recalled that when an employee who "had more degrees than a thermometer" once asked him for a raise, Ramsey replied that his company cared about effort and results, not qualifications.

5. American dream

Gen Zers shouldn't feel resigned to financial struggle given the wealth of opportunity in the US, Ramsey said, echoing the likes of Warren Buffett and Mark Cuban.

The "little man, the guy starting from nothing," benefits from the country's freedoms and the ease of access to its markets and information, he said.

If someone is motivated and has "two brain cells to rub together, you probably have a better chance of becoming wealthy in America today, starting from nothing, than in any place at any time in history."

Rose-colored glasses

Ramsey's comments are likely to strike some as overly optimistic and dismissive of deep-seated challenges such as wage stagnation, onerous amounts of student, a housing affordability crisis, and unequal opportunity across regions and demographics, not to mention the disruption that AI threatens to cause to many occupations.

Yet it's probably sound advice for most young people to maximize their chances of financial success whatever the world throws at them, and remember the forces of earnings power and wealth compounding work in their favor.