Gen Z adults, aged 18 to 25, are proving to be more financially savvy than previous generations at the same age, according to The 2022 Investopedia Financial Literacy Survey. However, they still have much to learn.

Over half of Gen Z adults are already investing, with 26% in the stock market. Yet, only one in four feel confident enough to explain the stock market to a friend. They feel most confident about spending and saving.

As 23-year-old financial advisor Zechariah Schaefer from Ascent Personal Finance, a firm specializing in advice for millennial and Gen Z crypto investors, says, “They know a lot about finance on the surface, but not deeply.”

Take Megan Rienzo, for example. This 20-year-old Siena College sophomore, studying finance, meticulously tracks her spending and savings using a smartphone app. She has learned how to value stocks and believes in investing but finds it too complex and risky for her current financial situation.

In summary, the financial outlook for Gen Z adults is full of contrasts.

Finding Their Financial Footing

Gen Z’s awareness of their financial limitations is notable. Participants in The 2022 Investopedia Financial Literacy Survey, which polled 4,000 U.S. adults, know they are just starting their journey to financial independence.

Only 46% of Gen Z feel confident about their financial knowledge, lower than baby boomers, Gen X, and millennials. This could be because there are so many sources of information today—YouTube, podcasts, TikTok, and traditional news.

“There’s so much information available that it’s harder to know what to look for,” Rienzo said.

Gen Z is confident in spending and saving. Forty-five percent claim advanced knowledge of spending, and 42% say the same about saving.

Schaefer notes that Gen Z’s spending and saving habits, influenced by watching their parents struggle with debt, are strong. Some feel pressured to save due to their own student loans.

Gen Z struggles with understanding credit and debt management. Only a third feel they have more than beginner’s knowledge in this area.

All in on Investing

Jack Rosenthal, who started investing at 8 with his grandfather’s help, exemplifies Gen Z’s enthusiasm for investing. He founded the Young Investors Club in high school, a fund for teens to invest in the stock market, now with about 100 members and over $100,000 in assets. He has also written several books on investing for teens. He’s 19.

Rosenthal embodies Gen Z’s investment passion. According to the Investopedia survey, 54% of Gen Z have some kind of investment, including mutual funds, ETFs, cryptocurrencies, and NFTs.

Investing is widespread among Gen Z. Forty-eight percent of Gen Z women and 60% of Gen Z men hold investments. Additionally, 45% of those earning less than $50,000 per year are investing, compared to 73% of those earning more than $50,000.

“Social media has made Gen Z more knowledgeable about investing than any previous generation at their age,” Rosenthal said. Changes in regulations, allowing teenagers to have supervised accounts, have also opened the stock market to them.

A 2020 Harris Poll survey found most people do not discuss finances with friends or family, but 71% of Gen Zers feel comfortable talking about money with friends, and 67% with family, the highest among all generations.

Emerging financial technologies are popular with Gen Z. About a quarter hold both cryptocurrencies and stocks, and one in 10 own NFTs. Men, in particular, own cryptocurrencies and NFTs at nearly double the rate of women. Despite their involvement, Gen Z admits they lack deep knowledge about cryptocurrency.

“That’s a recipe for trouble,” Schaefer warned. “Hearing about others making money in crypto and NFTs can lead to overconfidence and taking on too much risk.”

Watch and Learn

Gen Z, the first generation to grow up with smartphones and social media, spends about 6.5 hours on their phones daily.

But they aren’t just seeking entertainment—they’re looking for information. According to Pearson, YouTube and video are Gen Z’s preferred learning platforms, second only to teachers.

Investopedia’s survey found Gen Z is the most video-forward generation for learning about personal finance. YouTube is the top source for finance information at 45%, followed by conversations with friends and family, Internet searches, TikTok, and financial information sites.

The abundance of money advice on social media—from TikTok finance gurus to Reddit forums like WallStreetBets—makes vetting sources challenging. Despite this, nearly one in three Gen Zers prefer learning about finance through human interaction.

“The personalities on these platforms can make you forget that personal finance is indeed personal,” Schaefer said.

Video and social media have democratized access to financial information, previously reserved for those wealthy enough to pay for it. With this access comes the responsibility of researching investment advice and checking the credentials of information sources.

Cause for Concern

When asked about their financial knowledge, Gen Z is particularly concerned about taxes. Paying taxes ranks as their second biggest concern and the top skill they want to learn, according to Investopedia’s survey. Other big concerns are saving, borrowing, and managing debt.

The financial behavior of Gen Z is partly influenced by the COVID-19 pandemic. A study by the ADP Research Institute found 78% of Gen Zers were personally affected, with 39% losing jobs, being furloughed, or facing temporary layoffs.

Taxes

The lower the income, the more interest Gen Z has in learning about taxes. Thirty-seven percent of those earning less than $50,000 want to learn “how to do my taxes,” compared to 31% of those making more than $50,000.

One reason for this focus is the belief that Social Security will run out. Nearly one-fifth think it’s unlikely Social Security will be available when they retire, and 43% foresee a time when it no longer exists.

Another factor is the rise of self-employed or entrepreneurial Gen Zers, leading to more complex tax situations.

Debt

Gen Zers earning less than $50,000 are more concerned about saving and improving their credit score than those making more.

This concern matches the reality of debt young adults face. In 2020, Gen Z saw the largest growth in mortgage and personal loan debt, according to Experian’s consumer debt research.

Investing and managing risk

Despite more than half of Gen Z being invested in the stock market, investing and managing risk are among their least understood financial aspects. Thirty-two percent cite fear of losing money as a barrier to investing, and 22% don’t trust the market.

Rosenthal suggests the fear of risk is due to socioeconomic factors. Stock market volatility, retail investing popularity, the war on terror, and digital disruption have made investing scary for Gen Z.

“Massive swings in the stock market create fear, and that’s the only market this generation has known,” Rosenthal said.

Confusion also holds them back. The explosion of financial products aimed at simplifying investing has made it appear more complex. Forty-four percent of non-investors don’t know where to start, and 40% of crypto investors don’t fully understand it.

“I know Bitcoin is a thing, but I’m not sure what kind of thing exactly,” Rienzo said.

What Does Generation Z Need?

Overall, Gen Z is ahead of previous generations at their age in financial literacy. However, they may be moving too fast and relying too much on their own research.

Schaefer warns that the abundance of information can create a false sense of security. “You can find anything about a financial plan on Google, but Google can’t make you a personal financial plan,” he said. “My advice is to slow down, figure out where you are, and get help developing a plan for where you want to go.”

Methodology

The 2022 Investopedia Financial Literacy Survey measured U.S. adults’ understanding of financial literacy by generation. Conducted via an online questionnaire from Jan. 27 to Feb. 7, 2022, it included 4,000 adults, 1,000 each from Generation Z (18-25), millennials (26-41), Generation X (42-57), and baby boomers (58-76). Quotas and data weighting ensured representation across race/ethnicity, gender, region, and income. For more details, see the full methodology.