Gen Z is likely to face financial decisions more consequential than their parents did, making it essential that brands begin building connections with them immediately. They require education on personal finance basics like spending, saving, credit usage and mortgages as well as renting properties or investing.
Financial literacy education for Gen Z goes well beyond teaching them how to balance their paycheck with avocado toast and lattes; financial education helps these youngsters avoid taking on unnecessary debt while setting them up for long-term success.
1. Know Your Worth
Attaining financial empowerment begins with having a healthy sense of self-worth. Knowing yourself better makes it easier to make informed choices about how and where to spend or save your money, making wiser financial decisions overall. Achieve this requires living a balanced lifestyle – eating well, sleeping enough hours each night, engaging in physical exercise regularly and surrounding yourself with supportive individuals.
Financial empowerment also involves understanding your credit score and its workings. Good or excellent credit will allow you to borrow at advantageous rates and avoid high-interest debt, while Gen Z must learn more about long term investing and creating a stable income stream – these lessons will equip them for future economic challenges, providing valuable lessons they’ll use throughout their lives.
2. Set Goals
Establishing financial empowerment involves taking an integrated approach to money management. This may include setting long-term goals, tracking monthly spending and paying down debt while building up savings reserves in case unexpected expenses arise.
Gen Z individuals differ from older generations in that they care deeply about financial literacy and want to enhance it, yet 84% rely on their parents as sources for information which could be limited or inaccurate.
Gen Zers are making positive strides to improve their finances, such as setting savings goals and reducing credit card debt. But they need more education on investing, mortgages and loans; there are plenty of free resources available such as GOBankingRates’ “10 Best Budgeting Apps” or online courses taught by finance professionals to get them started – including asking their parents for advice or consulting an independent financial professional.
3. Create a Budget
Gen Z may be more adept at managing their finances than previous generations, yet many still need assistance with basic financial literacy. While they know they should save, many need help understanding more sophisticated options like retirement savings accounts and loans.
Many have witnessed their millennial counterparts struggle with debt, leaving them wary about debt and credit card usage themselves. It’s essential for these individuals to build credit, learn to budget, and take on small amounts of debt in order to make informed decisions later in life on larger financial decisions such as student loans, mortgages, or cars.
Financial institutions should assist Gen Z by educating them about basic personal finance principles as well as providing personalized content and tools for people at every stage of life – one such resource being Better Money Habits. To provide better support, financial institutions may wish to take into consideration some specific concerns of Generation Z when providing support services such as Better Money Habits which provides customized information and tools tailored specifically towards Gen Z members.
4. Manage Your Credit
Growing up after the financial crisis and watching their parents struggle with student debt has taught Gen Z to be careful when managing their money. They prioritize saving and take proactive steps towards securing their financial future.
Financial literacy programs provide them with a solid basis upon which to build. Once they become financially independent, such programs ensure they begin on the right foot.
Four out of five Gen Zers say money matters are their primary source of stress, making budgeting, saving and investing information invaluable in relieving their anxiety. Furthermore, teaching Gen Z about managing credit responsibly early will be pivotal to helping avoid unnecessary debt accumulation – this includes credit cards, car loans and mortgages as important areas to educate them on.
As they enter college, Gen Z will face many financial decisions that will shape their adult lives – including savings accounts, investments accounts, credit lines and mortgages.
Gen Z has proven itself lacking when it comes to financial literacy; many do not even know they should save 6-12 months’ expenses in emergency funds, let alone understand investing. According to Investopedia’s polling, almost one-third of Gen Z respondents felt like only having an initial grasp on stocks work.
Financial empowerment should take the form of a two-way dialogue aimed at meeting individual’s specific circumstances, weaving threads of financial literacy with topics like intelligent investing, behavioral economics and psychology into one cohesive message.