What is the financial behavior of Gen Z?
A recent study found that almost half of Gen Z is in debt, including student loan and credit card debt. While much of this debt is manageable, a few Gen Zers are struggling to keep up with their payments.
Gen Z is stressed out about their finances. So, they're working to establish good money habits now. They may be young, but Gen Zers' lives have already been riddled with financial obstacles, including record high inflation and bloated education costs.
For example, a new study by the Investment Company Institute (ICI) finds that “Gen Z households have nearly three times more assets in the [retirement] plan accounts (adjusted for inflation) that Gen X households did at the same age.” More Gen Z-ers have retirement plans set up and they've saved more in those accounts.
Gen Z is 55% less likely to be actively investing and concerned with financial planning. Both Gen Z and Millennials are highly unlikely to ensure their finances are highly organized and accurate with Gen Z 95% less likely to check all statements to verify accuracy.
Finding Their Financial Footing
Only 46% of Gen Z feel confident about their financial knowledge, for instance, which is a lower percentage than baby boomers, Gen X, and millennials who said the same.
Gen Zers face greater obstacles to financial success
Inflation's recent runup has indeed made it harder for those just starting out. More than half, or 53%, of Gen Zers say higher costs are a barrier to their financial success, according to a separate survey from Bank of America.
Gen Z faces unique financial challenges compared to older generations. College graduates earn 10% less compared to their parents, recent research found. High inflation — and affordability concerns among Gen Zers — extend beyond U.S. borders.
With that said, Gen Z is a credit-friendly generation--they're just careful about falling into debt traps. Sixty-five percent of Gen Z is credit active and half have a credit score of 661 or above. (Only 39% of Millennials had the same score or higher!)
Aligning on money is all the more pressing for younger generations, who are earlier on in their relationships and careers—nearly half (49%) of Gen Zers view financial compatibility as more important than physical compatibility. That's compared to 40% of millennials, 35% of Gen Xers, and 30% of baby boomers.
How Gen Z and Millennials Differ With Money Habits. Even though both generations value saving money, Gen Z is far ahead of millennials in terms of how much they're putting away. According to Finder's Consumer Confidence Index, Gen Z saves an average of $857 per month, while millennials save $294.
What are the stats for Gen Z and finances?
Working toward that goal, Gen Zers are already investing: Despite their young age, 54% of Gen Zs reported having investments, most of which were in stocks, cryptocurrency and mutual funds. [23] Conversely, only 43% of Baby Boomers reported having investments.
That has helped financial TikTok, also known as FinTok, take off. Now it's one of the most popular sources for financial information, tips and advice, particularly among Generation Z. The hashtag #FinTok, representing just the financial TikTok community, has more than 4.7 billion views on the platform.
According to the US National Association of Plan Advisors (NAPA), Gen Z has the lowest level of financial literacy, with only 28% of questions being answered correctly on average.
A new survey of 2,000 Gen Zers from the writing platform EduBirdie reveals that while work-life balance and enjoyment are important goals, cash remains king. A full 31% of respondents said their main career aim is to make lots of money.
Gen Z Struggles With Mental Health
Social media, which many Gen Zers have used for most of their teenage and adult life, exacerbates these issues — no other generation has had such immediate and unfiltered access to the news for most of their lives, which can lead to stress, anxiety, and other mental health issues.
Gun violence, as well as general crime and violence, and climate change rank for the biggest issue according to each age group, showing their awareness for national and international issues.
Generation Z
Thus, those in Gen Z are currently between the ages of about 11 and 26. As might be expected due to their relatively young ages, data shows that Generation Z demonstrates the lowest level of financial literacy among Gen Z, Gen X, boomers and millennials.
Data Dive: Gen Z women are struggling the most with stress, mental health issues | Ipsos.
Gen Z Are More Likely To Use the Internet To Make Money
According to Merriman, the internet removed many barriers to getting a side job. E-commerce and social media allow creatives to sell their work. It also provides networking opportunities that opened doors that past generations didn't have, Merriman added.
The report said, "Though Gen Z is interested in exploring and learning about saving and investing, the approach is much softer than in previous decades – it's all about personal growth and mental wellbeing in the now, and they would rather feel more fulfilled now than save for a future that is unknown."
What are the struggles of Gen Z?
Compared with older generations today, members of Gen Z are much more likely to report experiencing negative emotions such as stress, anxiety and loneliness, according to a new study.
Gen Z's Philanthropic Potential
The good news, however, is that this limitation doesn't deter them from contributing to causes they care about however they can. “[I]n 2022, Gen Z adults made an average of 5.3 donations — notably more than the 4.8 made by millennials and 4.7 made by Generation X.”
Gen-Z feels substantial anxiety and stress about jobs, long-term financial stability and major life steps, such as buying a home and starting a family.
Young adults are big spenders and big savers. And even with economic uncertainty and stress, the Gen Z generation is not paralyzed by money decisions.
Intuit's most recent Prosperity Index Study explains how Gen Z is leading the wave with this “softer” approach to life and finances. According to the study, 3 out of 4 Gen Zers say they'd rather have a better quality of life than extra money in the bank.
