A Simple Guide to Personal Financial Planning for Gen Z

As a millennial, I have many Gen Z friends, and I’ve noticed that this generation is great at questioning the status quo and challenging traditions. Gone are the days of rigid office attire and accepting answers like “that’s just how it’s done.” Gen Z, who grew up with social media, often turns to social platforms and financial influencers for money advice, according to Charles Schwab’s 2023 Modern Wealth Survey. This guide provides a financial professional’s perspective on personal financial planning for Gen Z.

Who to Trust for Financial Advice

With so many voices offering advice, it’s important to know how to find trustworthy information. Here are some reliable sources for good financial guidance:

– Peer-reviewed academic resources and studies  

– Professionals with financial credentials like CFP®, CPA, CFA, or CHFC  

– Reputable fund rating agencies like Morningstar  

Be cautious if the person giving advice uses blanket statements, creates urgency, or oversimplifies things. In those cases, it’s wise to double-check with a reliable source.

Your Financial Plan Should Be Unique

Pew Research shows that Gen Z is on track to become the most educated generation. Your learning style may be different from previous generations, shaped by digital learning during the pandemic and the endless information available today. If you prefer learning independently, through visuals, or by doing, take control of your financial future by writing down your goals. Make them as specific as possible, include visual elements, and rank them in order of priority. This will serve as your financial vision board. Check on your progress at least twice a year, and adjust your plan as needed. If staying accountable is difficult, consider working with a certified financial planner for extra support.

Work Smarter, Not Harder 

Many Gen Z individuals I talk to are focused on finding ways to work smarter, not harder. A popular new idea is “soft saving,” which means saving minimally for the future while focusing on enjoying life now. Though the term is new, the concept isn’t. For years, many people have spent their extra money on lifestyle upgrades and saved little for the future. This can be risky.

You don’t have to sacrifice everything to save for the future. Create a budget that fits your lifestyle and put a small amount toward your top financial goals. Without a budget, lifestyle creep can happen—where your expenses rise as your income does, leading to living paycheck to paycheck.

Thanks to the power of compound interest, even small savings can grow significantly over time. If you save a little and earn a 10% annual return, your money could grow about eight times over 21 years. Taking small steps now can set you up for future success.

Conclusion 

With Gen Z bringing many positive changes to the workplace, I hope this highly educated generation will use the right resources to build financial security. It’s important to know who to trust, create a plan tailored to you, and make your money work smarter for you.

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