Ditching The Stereotypes: Unveiling The Financial Savvy Of Gen Z (2024)

FAQs

What is the financial struggle of Gen Z? ›

Gen Z's Financial Reality is an Everyday Struggle

Workers in their twenties today have 86% less purchasing power than baby boomers did at the same age. “The cost of public and private school tuition has increased by 310% and 245%, respectively, since the 1970s” (para.

While Millennials and past generations were loyal to brands, Gen Z is more interested in shopping around and prioritizing value. They'd rather browse multiple brands at department stores than one at a flagship store. Marketers must keep an eye on these differences and other Gen Z buying habits.

Younger American (millennial and Gen Z) families represented 33.4% of households and owned 9.2% of total family wealth (72% less wealth) in 2023. The baby boomers' shortfall was the smallest of the generations.

Gen-Z Faces Financial Challenges, Stress, Anxiety And An Uncertain Future.

With no experience in a pre-digital world, Gen Z members are digital natives! In fact, Gen Z has never lived in a world where the Internet did not exist. They were literally born in the digital age. As a result, global events have actively shaped this generation's view of the world.

For example, a new study by the Investment Company Institute (ICI) finds that “Gen Z households have nearly three times more assets in the [retirement] plan accounts (adjusted for inflation) that Gen X households did at the same age.” More Gen Z-ers have retirement plans set up and they've saved more in those accounts.

Through a compilation of Gen Z interviews and studies from Bain & Co, CFA Institute, EY, and others, the article concludes that the youngest generation in the workforce is motivated by competitive compensation and quick career growth, and is quick to move on to other opportunities if they don't get that.

1-in-5 of Gen Zers live with their parents to save money. Although Gen Zers are 12% less likely than older generations to invest in a 401(k), they are 11% more likely to invest in a Roth IRA. Gen Zers are 62% more likely than older generations to have no expectations of returns on their investments.

Rising Costs. Saving money while living paycheck to paycheck is an almost impossible feat for many Gen Zers. With wages stagnating and the cost of housing, education and everyday essentials rising, this young generation has little room for savings.

Millennials will be the richest generation ever, but who gets that wealth is down to luck | Martha Gill | The Guardian. Illustration by Dominic McKenzie.

How Gen Z and Millennials differ financially? ›

“The reason that millennials don't save as much as Gen Z is likely because they have more financial responsibilities,” Adams said. “For instance, many are homeowners, have families and pay higher ongoing expenses, such as groceries, clothing, insurance and medical costs.”

Zoomers, however, are much better off than millennials were at the same age. The typical 25-year-old Gen Z-er has an annual household income of over $40,000, more than 50% above baby-boomers at the same age. Gen Z's economic power was on display at a recent concert by Ms Rodrigo in New York.

American Gen Zers, the oldest now entering their late 20s, have already accumulated substantial wealth through inheritance, investments, and entrepreneurship. Cerulli Associates estimates a seismic USD 84 trillion will transfer from baby boomer wealth in the USA to heirs, with Gen Z front and center.

Separate data from the Pew Research Center adds to the narrative that Gen Z is in relatively better shape than other young people of different eras. The median pay (adjusted for inflation) for those aged 18 to 24 was just over $15,000 in 1993. Zoomers in 2023 were raking in about $20,000.

Generation Z – also known as Gen Z, iGen or postmillennial – are a highly collaborative cohort that cares deeply about others and have a pragmatic attitude about how to address a set of inherited issues like climate change, according to research by Roberta Katz, a senior research scholar at Stanford's Center for ...

Bad Social Interactions

Another negative attribute associated with Gen Z by older generations is the inability to interact in person. They don't know how to talk to someone face to face. Due to the technology constantly at their fingertips, they're used to communicating online.

Gen Z consumers have strong opinions about the world they live in—and they aren't afraid to voice them. Gen Zers are known for their social responsibility, dedication to social and political issues, and their demand for authenticity when it comes to brands and advertising.