Regarding financial planning, Gen Zers are very different from other generations. They are much more likely to invest in cryptocurrency and retirement accounts. They are also more likely to have multiple income streams and save for a rainy day. In addition, Gen Zers are much more likely to use technology to manage their finances. This includes using apps to track expenses and investments and online calculators to plan for their future:
1. They are unwilling to be in debt
A recent case by the Financial Planning Association found that Gen Zers are largely unwilling to take on debt, even for major purchases like a home or a car. This contrasts with previous generations, who were more likely to finance large purchases over time. For Gen Zers, the experience of growing up during the Great Recession has made them wary of taking on any unnecessary debt. Instead, they focus on building up their savings and keeping their expenses low. This focus on financial stability will likely majorly impact the economy in the coming years. As more Gen Zers enter the workforce and earn their income, they will likely save a larger portion of their income and make more conservative financial decisions. This could lead to slower economic growth in the short term, but it could also create a more stable economy in the long run.
2. Many still depend on or live with their parents
It is unsurprising that many Gen Zer depend on their parents or live with them. This is due to the current state of the economy. With student loan debt reaching record levels and entry-level jobs becoming increasingly scarce, many young adults find it difficult to make ends meet. Consequently, they turn to their parents for help with rent, groceries, and utility bills. Although this dependence on parental support can be seen as a negative trend, it is important to remember that it is often temporary. Once young adults find stable employment and establish themselves financially, they can usually fend for themselves. In the meantime, however, this dependence can strain both parents and children. Parents may feel like they are being taken advantage of, while children may feel guilty or ungrateful. It is important to have open and honest communication about money to avoid misunderstandings or conflict.
3. Gen Z loves investing in crypto
Gen Zers are digital natives and early adopters of new technology. So it’s no surprise they’re leading the charge regarding investing in cryptocurrency. Crypto is a new asset class that offers a lot of promise but is also very volatile. That can be scary for some investors, but Gen Zers seem to take it all in stride. They’re willing to take risks and are more likely to invest in something they believe in. For Gen Zers, crypto is more than just an investment; it’s a way to make a statement. They’re investing in an asset that has the potential to upend the financial system, and they’re doing it on their terms. Gen Zers are defining their financial future and will not let anyone tell them what to do.
4. Many get personal finance advice online
When it comes to financial planning, Gen Zers are charting their course. Unlike their elders, who often turn to family and friends for advice, members of Gen Z are more likely to seek guidance from online sources such as TikTok and YouTube. This trend is partly driven by the fact that Gen Zers are digital natives comfortable getting their information from the internet. In addition, many Gen Zers feel that traditional financial advisors are not relatable or accessible. As a result, they are turning to social media influencers who can provide them with actionable tips for managing their money. While some older adults may view this trend with skepticism, there is no doubt that Gen Zers are redefining what it means to be financially savvy.
Gen Zers appear to be more open to taking risks regarding their finances. The willingness to take risks could lead to some interesting financial planning trends among Gen Zers in the years to come. Only time will tell what the future holds for this generation, but one thing is for sure: Gen Zers are sure to make their mark on the world of finance.
