3 Reasons Gen Z Are Money Mavens
It’s all too easy for older people to scoff at “the youth of today”. Generation Z (born between 1995 and 2010) were raised in a world immersed in technology and pop culture – a world very different to that of older generations. With such stark differences between the world today and the world fifty years ago, it’s natural that behaviors, tastes and outlooks may appear inexplicable from opposite sides of the generational divide. Unfortunately, what we can’t understand, we tend to judge…
This intergenerational alienation, however, may not affect Generation Z in quite the same way as the preceding Millennial generation (born between 1981 and 1995). While Millennials fall victim to jokes about “special snowflakes” and are stereotyped are serial brunch Instagrammers, Generation Z have not been scorned in the same capacity. Rather, this generation is increasingly receiving the nod of approval from older people, as they prove themselves to be smart savers and entrepreneurial spirits.
Although Generation Z can be stereotyped as stressed and depressed, this cohort is also deemed to be more risk-averse, more responsible and more educated than previous generations. Recent research also suggests they may be very good with money. So what makes Generation Z so financially savvy? What can we learn from young people about taking care of our finances?
1. Amazing savings
Frightening world events were inescapable in the childhoods of Generation Z. While wars, terrorism and financial crashes dominated the news, the news itself became impossible to avoid as media became omnipresent within society. With so much information, and so much to worry about, it’s little wonder that Generation Z is one of the most cautious, responsible generations in recent decades.
This cautiousness manifests in Generation Z’s approach to saving. Research suggests that around 40% of Generation Z students save 20-40% of their monthly income, while 20% save 40-60% of their monthly income. These young people save a lot – and save consistently. As the typical Generation Z-er’s income rises, so too do their savings.
2. Financial literacy
South African charities, financial companies and government initiative have been working to increase financial literacy in the country for a number of years. From companies like Wonga developing resources to educate consumers about their products, to the updated Financial Sector Code which ensures a percentage of all finance industry post-tax profits go towards financial education, this is an active area of change in the Rainbow Nation.
Amongst Generation Z, however, financial literacy is at a multi-generational high. Although a financial education gap is still evident across social groups in South Africa, young people are increasingly switched on to finance, with the digital tools at their fingertips to learn about and access financial services.
3. Curbing consumerism
Despite being bombarded with endless digital content showcasing fantasy lives full of the latest must-have fashion, beauty products, cars, home furnishings, accessories and gadgets, Generation Z has taken a stand against consumerism. This, perhaps, is a generation who can see through the flimsy veil of advertising, instead focussing on their priority: building a stable future.
Rather than buying items, Generation Z is more likely to save up for experiences. Having watched Generation X and Millennials struggle with reduced job prospects, stagnating incomes and unstable economies, Generation Z wants to save up to buy their own stability – and we applaud them!