Gen Zers understand how to utilize the latest technologies and applications, and look for financial products that reflect their values and beliefs.
But they struggle with financial literacy; 84% rely on friends and family for financial information which may be outdated, incomplete or wrong. This poses serious problems.
Self-Education
Gen Z has watched its elders struggle with student loan and credit card debt, which has informed their perspective of borrowing and spending habits. Because of this experience, they tend to avoid debt altogether (including mortgages) while learning that saving is the key to creating wealth for future.
Gen Z has it easier than previous generations when it comes to accessing information about personal finance and investing than previous generations did at their age, thanks to videos and social media. What used to be exclusive information can now be easily accessed for free by anyone with a smartphone and internet access.
Even with such accessible information, 84% of Gen Z still rely on family and friends for financial knowledge, which may not always be accurate or up-to-date. Therefore, it’s imperative that Gen Z educate themselves through positive influencers and independent research.
Self-Responsibility
Gen Z individuals are making more financial decisions on their own than previous generations, having seen Millennials struggle with debt and their parents deal with recessionary conditions first-hand. This experience has motivated Gen Zers to seek knowledge about money management.
Although there is an overwhelming amount of financial advice available today, from self-proclaimed experts on TikTok and Reddit to Instagram and YouTube, Gen Z individuals have difficulty distinguishing false or incorrect information. Furthermore, almost 85% rely on family and friends for guidance when making financial decisions.
Gen Z often lacks financial education when it comes to topics like budgeting and investing, which is critically important as they transition into college and then the workforce. Partnership with an adviser may provide deeper understanding as well as personalized assistance that may not be found online or through peer-to-peer apps.
Personal Empowerment
As with millennials, Gen Z is interested in investing. Over half hold investments such as stocks and non-fungible tokens (NFTs). But many feel their knowledge of investment remains basic.
They often struggle with the overwhelming amount of financial advice found online through social media channels like TikTok and Reddit forums; it can be hard to know what information is credible and reliable.
While Gen Z individuals may be concerned with financial literacy, many still rely on parents and family for advice regarding savings, retirement plans, mortgages, loans, etc. For this reason, banks need to find ways to connect early with Gen Z members to help them understand all available options – this will equip them for making important financial decisions as they grow older.
Debt Management
Gen Zers are financial pioneers, often setting goals centered around health and homeownership. Unfortunately, however, their goals could be derailed by inflation, student debt and money misconceptions.
As an example, due to an abundance of money-related advice — from self-proclaimed experts on TikTok and Reddit to websites such as WallStreetBets — proper vetting can become an overwhelming task, leading to inadvisable decision-making and potentially poor choices being made.
Gen Zers often struggle with basic financial skills such as paying taxes and borrowing/managing debt. A third of Gen Zers consider themselves novice at credit/debt management due to a lack of resources; unlike millennials and boomers, Gen Z prefers getting money information from friends/online sources rather than from parents/family; therefore offering tools and personalized assistance can help Gen Zers avoid potential pitfalls while reaching their financial goals.
