For quite a while, millennials have been causing a hubbub in the consumer market. As they grow older and partake in bigger, life-changing financial decisions, their younger siblings are entering the world of adulthood.
Born in 1997 or later, Generation Z comprises 67 million of the United States population in 2019. In 2020, Gen Zers had been projected to make up 40 percent of consumers — with their oldest members turning 23 years old.
Research, Research, Research
One substantial characteristic of this generation is the technological world they grew up in. It is the era of smartphones, laptops, the Internet of Things, etc. These technological advancements have brought convenience through a 6-inch screen.
With this, information has become accessible. A simple Google search gives them the answers that they need — from answers to their homework to spiraling existential questions. These Gen Zers are taking the first step to financial planning through researching until the day that they will need a lawyer to help you with financial planning.
By 13, Gen Zers have already begun their research on how to handle their finances. Consequently, 64 percent say that they have started independently learning about this aspect of their lives.
Aside from financial literacy, Gen Zers are known to research the products that they are planning to purchase before opening their wallets. They weigh the cost and check for prices all over the internet as well as their peers.
As a result, Gen Z is known to be the most informed and educated generation. This reflects on their unique take on handling money. They grew up to become practical with how and where they spend their money.
Gen Zers View College Education with Practicality
When it comes to education, 75 percent of Gen Zers recognize other means of gaining education other than going to college. Additionally, 88 percent of the class of 2017 considered job availability and career preparation — with medicine, sciences, biology, and business being on top — as their priority in selecting a major. They cut their college expenses by going to school in-state, living with their parents, and commuting.
Work and Income: “Side hustles” and Free Food
Lo and behold, the “side hustle,” or a job that people take on other than their regular 9-to-5. These side hustles tend to be their hobbies that they end up commodifying. Sometimes, it’s a part-time job to make ends meet. Either way, side hustles allow people to make extra money, and 77 percent of Gen Zers do so for this very purpose.
Contrary to the older generation’s preference for 401(k) match and health insurance, Gen Zers are attracted to free food and travel perks. This deviation from crucial benefits may stem from the reliance on their parents’ plans. On a long-term approach, paying more attention to leisurely perks may backfire in the future of their financial health, especially in paying off debts.
Somebody Pays the Bills
When it comes to paying the bills, Gen Zers are not entirely alone in carrying the burden of the monthly mail. Parents, guardians, or other family members pay for Gen Zers’ housing costs (46 percent) and health insurance (42 percent). Cellphone bills, however, are tied on 40 percent between Gen Zers and their family. The little things, such as transportation expenses and groceries, are paid by Gen Zers.
Gen Zers Remain Anxious
All these may not sound terrible — somebody pays for the bills, extra income, cut off some expenses from college — but Gen Zers cannot help but feel anxious about their personal finances. 41 percent of Gen Zers feel this way, and nervousness and confusion come second with 40 percent. Unfortunately, only 21 percent reported that they are content with the current state of their finances.
The COVID-19 Poses Setbacks
This feeling of anxiety, nervousness, and confusion could have been worsened by the COVID-19 pandemic. For the adults of Gen Z, it should have been the time when they learn independence and self-reliance. However, the spike in the unemployment rate and the decline in the economy has greatly affected this significant shift in their lives.
According to Gen Z Planet, the COVID-19 pandemic has affected their social life (56 percent) the most. Following this are their future education plans, family finances, mental health, future career plans, and job loss.
Aside from mere anxieties, the pandemic has caused real-life consequences in Gen Zers’ careers. 66 percent of Gen Zers reported that the pandemic made their chosen career path to become unstable. Moreover, 11 percent suffered cutbacks from their pay.
In a way, it is comforting to see young people being educated about their finances. This awareness, when handled carefully, could lead them to better financial success in the future. Perhaps, there will come a time when young people could enjoy living their lives without the nagging anxiety of living from paycheck-to-paycheck and the daunting student loans.