The Financial Needs

Gen Z Finance 101

Gen Zers are passionate about their wellness, and that includes their financial health. They’re savvy, but they may not fully understand all of their options.

They’re focusing on upping their financial literacy and looking at new areas of investment, like crypto. But they’re also anxious about their money. This is why they need your help.

1. They’re growing up fast

Gen Z is getting their financial bearings at a much younger age than previous generations. They’re more aware of their financial literacy than any older generation, but they want to build their confidence and knowhow even more.

Many Gen Z individuals watched their millennial parents struggle with student debt and other financial hardships during the 2008 recession and COVID-19 pandemic, making them more cautious about taking on too much debt. This translates into their approach to saving as well, where they favor lifestyle spending and “soft savings” goals over aggressive savings habits.

Brands can help Gen Z by providing truthful information about savings, investments, mortgages, and loans that are easy to understand. They also want to see that companies align with their values and have a good, socially responsible impact. This includes offering options to donate money to charity through digital banking platforms and a clear, unbiased explanation of interest rates on credit cards. Digital natives will quickly sniff out misinformation or a lack of transparency.

2. They’re digital natives

Gen Z’s digital upbringing makes them eager to use technology to streamline their financial processes. This can include anything from paying bills online to banking through mobile apps. In fact, a recent survey shows 44% of Gen Zers would prefer to conduct their financial business with a technology company.

This generation also tends to rely on social media as their primary source of information. They search for personal finance advice on Tiktok (a trend coined FinTok), on YouTube, or even on Instagram.

Despite their lack of familiarity with traditional financial products, Gen Zers are showing early signs of interest in investing. They have embraced online banking, and they are often open to new avenues of investment — especially those with high returns, low fees, and minimal risk. This is largely due to their comfort with technology and the ease of access to investment information. They are also looking forward, ranking a secure job as their number one life goal.

3. They’re looking forward

Gen Z is a goal-oriented generation with a clear idea of the financial goals they want to achieve in the future. They are keen on investment and peer-to-peer payments and may be open to digital-only banking options provided by legacy institutions, neobanks or fintech companies.

As they step into the workforce, they are determined to be financially independent and have their money under control. They’re likely to prioritize personal finance management tools such as budgeting apps and Robo-advisors, as well as alternative lending solutions like P2P payment platforms.

In 2022, more Gen Zers than any other generation set a financial goal related to improving their financial health, according to Northwestern Mutual data. These goals include creating an emergency fund, establishing a budget, increasing their financial literacy and managing or building credit.

4. They’re savvy

Gen Z has seen a lot and understands the ins and outs of money. They’re also self-assured, with 60% reporting feeling more financially confident than they did prior to the COVID-19 pandemic. They’re saving and keeping track of their pennies. A fifth of them even say they’re shopping second hand or refurbished to help with budgeting.

Scroll through TikTok and you’ll find countless “life hack” videos, with the likes of finfluencers offering tips on everything from stretching food budgets to doing the 100-day envelope challenge. These kinds of lifestyle changes are helping to shape a generation that knows how to prioritize quality of life over beefing up their investment portfolios.

As a result, Gen Z has some concerns about their financial literacy. Eighty percent of them rely on parents and family for information, but that can be challenging because older generations often have different opinions and ideas on how to handle their finances. This means that providing digital financial literacy programs is becoming more important than ever for Gen Z.

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