Generation Z is the first generation to grow up with internet connectivity, smartphones, and computers. Millennials have remained in the limelight of the companies, but the oldest of Gen Z are now in college. Companies are now paying attention to them about how they spend money. Also, financial literacy is an important step for banks that are trying to make a connection with Gen Z. the recession period, their parent’s struggle of getting financial security has influenced the financial literacy of Gen Z. this generation is evolving and many have a good source of income. These young people are entering their adulthood in the pandemic phase that has upended the economy.
So, this deep experience of economic certainty will influence the spending habits that Gen Z has learned from their previous generations. This generation is already developing financial habits which will stick with them throughout their adulthood. Therefore, in this article, we will talk about what are the financial habits of Gen Z that will remain with them always.
Money management skills
Most Gen Z teens pay attention to financial literacy, however, most of them depend on their family and acquaintances for information about financial literacy. This option is quite difficult as every parent has different financial information, and also does not have any idea about mortgages and loans. Most often parents do not understand these concepts completely. The situation now has completely changed with the availability of banking software, mortgage, and loans. In the meantime, most banking institutions and companies do not support pension professionals to invest regarding the benefit of retirement. This completely means that Gen Z individuals will have to more reliable to make financial decisions in comparison to the decisions their parents took.
Debt is worse than ever
Many individuals of generation Z have been growing up seeing millennials with the burden of student loans and debt, which directly influences their financial habits. Gen Z is extremely hesitant when it comes to taking any debt at all. However, this approach is quite positive, because having too much debt is also a bad decision. While generation Z individuals also need credit and take small debts as it is important in taking out fund for larger financial steps. Therefore, some of the teens know how credit scores and long-term credit history have a major role in getting approval for the fund. So, having this information about managing debts will help teens to give a better foundation for developing financial literacy.
Gen Z can manage debts and money themselves
Gen Z is the generation born with software and calculators for every little thing to do in their life. While some kind of self-awareness and knowledge is good in many aspects. However, when it comes to money, it is important to seek professional help for the management of debts. Taking professional help can result in more options for debts and bank accounts which will make a great bond with banks. Also, having professional assistance can help Gen Z to differentiate between when it is better to take professional help and when it can be hazardous.
The financial impact of covid-19 on Gen Z
This covid-19 pandemic has a great effect on the finances of Gen Z. Individuals less than 25 years have been affected adversely by the pandemic and lockdown who have been working. Consequently pandemic made their habit to cut their spending and prioritize savings. Most of them become socially minded and have also tried to buy from small brands directly throughout the pandemic. Also, because of this, the influencer culture is drastically changing.
How financial literacy program can help Gen Z
A generation has a wide range, from individuals who are in college to who is just 10 years old. So, every individual requires a different kind of help. However, early high school is the ideal phase for creating financial literacy among Gen Z. Although generation z students need better financial literacy, so they can get an idea about money management. However, with poor information on financial literacy, Gen Z has to know more about financial literacy.
Therefore, Gen Z is growing and many of them are earning income to add in their source. So, as their spending capability increases, is the list of their financial decisions also increases. Being aware of the fact that this generation relies more on banking institutions. Financial institutions have a better understanding of what this generation exactly cares about. Also, what are the things that motivate them for financial literacy, and how they operate it? No doubt that this generation is complex, but they have a very straight and clear mindset. Therefore, financial institutions should start giving advice, so, Generation Z would be able to achieve financial stability.