Gen Z Money Matters
Jeffery Perry shares a post that explores Gen Z and their move towards financial acumen.
Gen Z is no longer just children. The oldest members of Gen Z turn 25 in 2021 and are demonstrating their own attitudes about money and their financial futures. As the first generation to be completely immersed in digital technologies, from the ease of buying almost anything with a touch of a smartphone, endless subscription opportunities, and cashless payment systems, it is easy to assume Gen Z to be perpetual consumers with limited financial discipline. Quite the contrary, studies reveal that Gen Z is emerging with more financial acumen regarding debt, saving, and retirement compared to their Millennial siblings and Gen X parents when they were at similar ages.
Gen Z is generally defined as those born between 1996 and 2016. Why analyze Gen Z’s attitude towards money? It is because Gen Z will be the driving force in the economy very soon. According to Bank of America research, in less than a decade, Gen Z will represent 27% of the world’s income, surpassing that of Millennials.
Gen Z has witnessed two phenomena from earlier generations that inform their approach to money – massive student loan debt and out-of-control credit card debt.
Millennials, often Gen Z’s older siblings, have racked up half a trillion dollars in crippling student loan debt. To make matters worse, according to Pew Research Center, there is an 11% default rate and over 50% of Millennials do not see a path to paying off student loan debt given their current career outcomes and prospects. Gen X, often Gen Z’s parents, has routinely racked up the highest credit card debt of any generation from early adulthood through to today. About 50% of Gen X revolve credit card balances with no end in sight. While this extensive use of plastic has fueled the economy, it has left many Gen X trying to reduce consumer debt as they approach retirement age. According to a Schwab retirement study, 42% of Gen X is more focused on debt repayment over retirement savings.
Key points include:
- Student loan debt
- Credit card debt
Read the full post, Gen Z Shows Early Signs of Financial Acumen, on LeadMandates.com.