Gen Z Money Attitudes
Updated: Jul 17
Many factors of life shape financial habits. Due to our ever-changing world, every generation has different beliefs, attitudes, and values regarding worldly issues, including money and financial management. Generation Z (post-Millennial generation born after 1996), for example, are overwhelmed with all the information thrown their way. Being one of them, I wanted to understand the forces behind my generation’s money habits. What makes us so different when it comes to financial management and what causes those differences? My quest resulted in the creation of this blog post.
1. Technological Advancements
Invention of the first modern computer in 1936 has changed the world forever. Then, the internet, smartphone, social media, and WiFi followed. Technological advancements have shaped our realities, making Gen Z’ers the first digital natives. They are fortunate to have the vast amount of information at the tip of their fingers, but that does not necessarily mean they inherently make better financial decisions. Due to the factors that will be explored later in this blog post, young people often feel pressured to make decisions that are different from the previous generations to avoid their mistakes. As a result, Gen Z’ers are more conscious with their spending habits, more practical with their career choices, and more cautious with loans and debts (Visual Capitalist).
In the 70’s, a typical college graduate was able to save up enough money to afford a house from just one year of working. Now, it takes years of saving and multiple loans for a college graduate to afford a house. I know personally as my mom is always telling me stories of how she only earned an Associate’s degree, but was able to have a good career and afford a house in her 20’s.
While younger generations might make more money in the present time, they actually earn less because of overall cost inflation. This makes saving and being frugal essential for Generation Z: 65% enjoy discounts and rewards programs (IBM), 72% say that cost is the most important factor when making a purchase, and 47% use their phones in-store to check prices and ask family or friends for advice (Visual Capitalist).
If an Associate’s Degree was enough for my mom to have a stable career, afford a home, and start a family in her 20’s, it surely does not hold that much power today. Younger generations are more keen on choosing a life path that provides the most job availability, and that means getting a college education in a high-paying field. As college education is more common, it makes the workforce more competitive. In addition to price spikes, competition makes it difficult for Gen Z’ers to achieve the same financial and personal success with the level of ease that the previous generations had. As a result, many young people forgo traveling or taking a gap year, while focusing on graduating right away and getting a job instead (Visual Capitalist).
4. Debt and Credit Cards
Having witnessed Millennials stockpiling student debt of $1.7 trillion, which is only second to mortgages, Generation Z are anxious about their own loan balances. So much that 61% are willing to accept a job they’re not passionate about to pay off the loans. Many are hesitant to take on any kind of debt at all. This shapes their credit card habits, too, with only 14% to use credit cards as a payment method while 58% to pay with debit cards. However, building a credit score is like putting together a resume – a way to show if you have the responsibility to pay off your bills and debt. This is a factor to consider as the generation matures and faces life events requiring to establish credit history and take out larger loans.
5. Lack of Financial Education
When I was in high school, I learned about Shakespeare, but not budgeting. Even math and Pythagorean Theorem do not teach you APR calculations or savings basics. I do not have a checkbook. I use free online services to file my taxes and follow their every instruction because I do not know anything about these financial institutions. Sadly, this is the case for many young people right now, who lack financial literacy foundations. If you add inflation, competition, and debt to the equation, it’s no surprise that anxiety around money is the primary source of stress for 4 out of 5 young consumers.
My findings made me wonder: how come it’s been so difficult for the most technologically advanced and informed generation to master the money matters? What would be a good solution to address the problem? With this in mind, I joined the Maiven team, where we are working on a tool to help Gen Z’ers make sense of their finances. Our goal is to educate, provide resources, and develop financial literacy in an accessible, fun, and engaging way. We decided to make it a game! First personal finance game of its kind. While in the early stages of development, we would love to be guided by our users and build an ideal solution for them. Please give our game a try and tell us what you think.