Gen Z is on track to become the most financially-savvy generation, according to new research

Born between 1990 and the 2000s, Generation Z may be overlooked as still children, but, as they are now completing upper education and entering the work field, Gen Z’ers seem to surpass all expectations and stand out as the new face of financial power.

 (photo credit: INGIMAGE)
(photo credit: INGIMAGE)
Born between 1990 and the 2000s, Generation Z may be overlooked as still children, but, as they are now completing upper education and entering the work field, Gen Z’ers seem to surpass all expectations and stand out as the new face of financial power.  
Growing up in an economy that favors technology, social media, and entrepreneurship, the “iGeneration”, as it’s sometimes called, shows not only excellent money management skills, but also a knack for investment.
Gen Z shows a responsible approach towards debt
Data from the Financial Conduct Authority reveals that Generation Z is the least likely age group to experience debt and this is mainly due to the fact that they’re in a hurry to pay off student debt. Further research from the National Society of High School Scholars also found that half of Gen Z’ers use their personal savings to contribute to their college fund and 71% get a job in college to pay off the tuition. And, since student debt is, for many people, the biggest and most stressful source of debt, paying it off earlier gives them the freedom to explore other investment options in the future and avoid financial stress.
Healthy savings and investment habits
In just a few years, Gen Z will account for about 40% of the total world population but, despite their incredible spending power, data shows that this age group is actually very reserved with the way it spends money and shows healthy personal finance habits from an early age. Saving and investments which, according to The Money Pig, are two of the key secrets to growing wealth, are not a secret to the young generation.
In an effort to gain financial independence, Gen Z’ers are opening saving accounts earlier than any other age group and 50% of them say that they aim for at least $2,500. Since this is a generation of digital natives, it comes as no surprise that 26% are saving for phones and other devices, 17% are saving for personal vehicles, and 11% for college. Moreover, most of them rely on banking apps to keep track of their finances and rarely go to the bank’s physical offices.
Although investment rates among Gen Z’ers are relatively low when it comes to traditional investments such as real estate, the number of young entrepreneurs is growing steadily and there’s a whole new wave of success stories who show that gaining your first million in your 20s is entirely possible. Generation Z also shows an interest in alternative investments such as cryptocurrency and when they do buy stocks, tech companies such as Apple, Google, and Amazon, seem to be their favorites, along with innovation-driven companies like Tesla.
These figures don’t necessarily indicate that all centennials have reached peak financial literacy – in fact, on EverFi study showed that 50% of Gen Z’ers don’t know how to calculate their net value. However, the young generation is quicker to develop healthy financial habits and shows a responsible mindset that can lead to earlier financial stability.