Gen Z’s Money Mindset and What it Could Mean for their Financial Future
Generation Z is increasingly using social media for financial advice, ideas on how to generate income, and guidance on how to view money in general, potentially reshaping how their finances are managed. Analysts and financial experts have observed this growing trend among younger clients navigating the complexities of financial planning.
The challenge? Gen Z is developing a unique philosophy toward money and the future through crowdsourcing information online. They are thinking about money differently, which is driving new behaviors in their financial planning.
While previous generations made money just to create a fat bottom line, Gen Z appears driven to create balanced lives. As Forbes recently noted, Gen Zers want to enjoy physical, mental, and financial health. Money isn’t something to pursue just for the sake of pursuit; it’s a tool to build the kind of life Gen Zers want.
In other words, there’s more to life than the long commute, the eight-hour day, the ride back home.
“I think that’s a big thing with Gen Z,” said David Reis, an independent sales representative and regional vice president with Primerica, one of the nation’s distributors of financial products and services. At 27, he’s a Gen Zer, too. “They value flexibility and freedom in life.”
This mindset marks a departure from the past. Earlier generations got educations, landed full-time jobs, and socked away retirement savings; it was a tried-and-true path to economic security.
That was then. This is now.
Student-loan debt is a fact of life for some people. Some recent graduates enter the workplace with a diploma in one hand and a hefty education bill in the other. Adding to their concerns: home prices. The median price for a home in the United States topped $410,000 in the previous quarter. Meantime, wages haven’t kept pace with the rising cost of living.
Yet Gen Z is not without resources, noted the Life Insurance Marketing and Research Association (LIMRA). In a recent survey, LIMRA found that almost half of Gen Z turned to online help for financial and insurance recommendations. A third of young Primerica survey respondents said they relied on financial influencers for direction, too.
Also, Gen Z can probably take credit for turning the words “side” and “hustle” into a new financial term. In another survey, more than one-third of respondents in this age group said they augmented their income with side hustles – more than any other age group.
They’re doing more than just hustling, too. Analysts report that clients are “revenge saving.” They’re aggressively cutting back on expenditures, perhaps in response to financial uncertainty or making up for earlier “revenge spending” when the COVID pandemic lockdown eased and the world was free to travel again.
They’ve also learned to look for bargains, buying items at lower costs – or not buying them at all.
The message to this age group is as plain as a text from mom: Gen Z faces financial challenges.
Another fact: Gen Z is ready to meet them – but they need help. Respondents to Primerica’s survey have said they need direction to make the proper investments, buy the right insurance, create the right savings plan, and chart a path leading to the balanced life they seek.
Reis, of Primerica, thinks his age group is committed to creating a secure future but isn’t sure how to get there.
“They don’t know where to go and how to act upon a plan,” said Reis. “They don’t want to make a mistake.”