In today’s fast-changing economic environment, understanding finances has become more important than ever. Gen Z, the generation born between the mid-1990s and early 2010s, is taking an active approach to learning about money and budgeting.
Despite common beliefs that they are financially careless, many in Gen Z are eager to improve their money management skills.
Why It’s Important
Gen Z is growing up in a world marked by economic uncertainty. They have seen the financial struggles of their parents during the 2008 recession, the economic effects of the COVID-19 pandemic, and the rising cost of living. These experiences have made them more aware of the need for financial stability.
With the increasing cost of higher education, many Gen Z individuals are taking on significant student loan debt. They understand the long-term impact of this debt and are determined to manage it wisely.
Gen Z is also entering the workforce at a time when the gig economy is booming. Many are working as freelancers, contractors, or in part-time positions without benefits or job security. In fact, nearly half of Gen Z members have side jobs due to concerns about money, according to a 2023 Deloitte survey. This drives them to become financially independent and skilled at managing irregular income streams.
Gen Z Finances: How They Learn
Gen Z is known for being comfortable with technology and the digital world. They often seek financial advice from websites, YouTube channels, and social media platforms like TikTok. They are tech-savvy and frequently use budgeting and financial management apps like YNAB and Oportun, which help them track expenses, invest, and save—all from their phones.
Many schools and employers are recognizing the importance of financial literacy and are including it in their curricula and training programs. Gen Z is taking advantage of these opportunities to gain a more structured understanding of financial management.
Gen Z Savings: Their Top Financial Goals
In 2023, the most common financial goal for Gen Zers remained to increase their income, with 39.5% of the generation focused on this. However, 27.3% are now preparing to buy a house, with homeownership-related goals rising from 37.3% in 2022 to 45.1% in 2023.
Despite higher mortgage rates, rent, and real estate prices, nearly half of Gen Zers have homeownership goals, which include saving for a home, buying their first home, or moving out of their parents’ house, according to a study by Rocket Mortgage.
Benefits of Financial Literacy
Being financially knowledgeable gives Gen Z the tools they need to make informed financial decisions. It empowers them to take control of their financial futures and reduces the stress that comes with money matters.
With a better understanding of budgeting and debt management, Gen Z can also handle the challenge of student loans and other debts more effectively. This helps them save for both short-term and long-term goals.
By learning to budget, Gen Z can build a safety net for unexpected expenses and emergencies. This financial security ensures they are better prepared to handle unforeseen circumstances, reducing financial stress.
Gen Z’s proactive approach is a testament to their resilience and adaptability in a constantly changing economy. As they continue to embrace opportunities for financial education, they are laying the groundwork for a more financially secure and stable future. They are working to break the cycle of financial instability that has affected previous generations and are striving to manage their finances more responsibly.
