Teaching Gen Z About Personal Finance: What They Want to Know
Generation Z is eager to take control of their personal finances with an emphasis on becoming debt-free.
Generation Z is rapidly coming of age to join the workforce and start saving for the future. Even though they're currently the youngest generation, generally accepted to be anyone born after 1997, they're making a large financial impact. According to Business Insider, Gen Z is slated to be the largest consumer generation by 2026 , just slightly overtaking Millennials.
It's never too early to begin learning about personal finance, but as it has been for generations in the past, Gen Z has different goals and attitudes toward the way they bank. Trends are just starting to reveal themselves, and they can show us a lot about what Gen Z wants to learn - and should learn - about taking control of their finances.
A generation that's taking control of their banking
Millennials eagerly adopted online banking for its convenience, but Gen Z has been born into it. They have mastered technology that makes banking more accessible, and as the American Banking Association found, about two-thirds have a bank account . Even more astounding is that four in 10 Gen Z'ers reported having used a budget to manage their finances. Not only are they ready to save, but they are actively taking control of their money.
It's also important to note that this generation, though young, is eager to work. Nearly 70% of respondents had some form of income, whether it be from a part-time job or allowances earned at home. It's not uncommon for them to use a credit card, as 37% already report owning one.
Generation Z is incredibly comfortable using technology for personal banking and have spending power, but still struggle with overcoming the problems of prior generations.
Defeating - or avoiding - debt is a priority
If there is one thing that Gen Z wants guidance on, it's managing debt. Having watched Millennials shell out thousands of dollars for education, cars and homes while being in debt, Gen Z'ers want to avoid this stress.
This may be difficult considering that 60% of them expect to take out loans for college for as much as $30,000, according to t he ABA. Though this generation is cautious and practical with their spending, they want to learn how to create a clear path to being debt-free.
Even though they're being proactive with their money, teaching Gen Z about different student loan options and repayment methods can help them be even more in control of their finances. They are already well-versed in mobile banking and budgeting, but continuing to educate them on the long-term benefits of smart financial decisions is crucial.
Generation Z is optimistic about their financial future, and feel like they've learned from the past to make better economic decisions. Encourage open discussions about their goals and guide them toward some of the best options available.
Interested in learning more about how a college saving plan can set your next generation up for success? Reach out to your local Vectra Bank representative today for tips on saving and student loan options.