Friday, 14 September 2018
Generations tend to be defined by common characteristics, including their collective attitudes toward social issues, politics, education, and, of course, money.
For example, the Silent Generation is known for saving money and paying with cash. Baby Boomers are considered the “buy now, pay later" generation. And Generation Y, or the millennials, has earned a reputation for spending what they earn, and then some.
So what about Generation Z, the preteens, teens, and college students of today? Turns out Generation Z — people ages 14 to 21 — are shaping up to be a generation of savers.
According to a 2016 study by The Center for Generational Kinetics, 12 percent of Generation Z has already started saving for retirement, and an additional 35 percent plan to start saving for retirement when in their 20s.
According to a study by Forbes, 57 percent of Gen Z respondents said they would prefer to save money than spend it immediately. In a survey by Lincoln Financial, more than half of the 400 respondents reported having a savings account, and 71 percent said saving money for the future was one of their top priorities.
In the Center for Generational Kinetics study, which surveyed approximate 1,000 Zs, one in five said debt should be avoided at all costs, and 29 percent said personal debt should be reserved for a few select items. According to a January 2018 Experian “State of Credit" report, Generation Z has the fewest number of credit cards on whole, and the lowest average balance on the cards they do have.
According to the Generational Kinetics study, 38 percent of Zs surveyed plan to work during college and 24 percent said they plan to pay for college with personal savings.
The Center for Generational Kinetics found a whopping 77 percent of Generation Z is working and earning their own money. For comparison, this percentage is roughly the same as the percentage of Millennials — who are a decade older — who are earning their own money.
Gen Z is the first generation of digital natives. They have never lived in a world without the Internet. They have had instant access to an infinite amount of financial information, making them far more financially savvy than previous generations. For example, according to a survey by TransUnion, 58 percent of Generation Z respondents said they were familiar with credit scores and how they work.
The Snapchat generation is also proving to be early adopters of FinTech, or financial technology. This encompasses everything from online budgeting tools to mobile apps that build savings accounts automatically.
For example, the mobile app Digit regularly analyzes a user's cash flow and every few days will automatically transfer a small amount of money to the user's FDIC-insured Digit savings account. Mint and other budgeting tools give users real-time insight into all their accounts, allowing them to constantly know their financial status and make informed decisions.
And Generation Z is using it all of it. Again according to the Lincoln Financial survey, Generation Z is utilizing technology — in the form of online searches, mobile apps, financial blogs, and social media — almost as much as millennials, who, again, are ten years older. Case in point: the study found 10 percent of Gen Z respondents were using Mint, a budgeting and financial management app, while 15 percent of millennials used the same app.
Another benefit this technology offers these young savers is the ability to see their savings grow, in real time, and continually monitor the progress they are making toward their financial goals. And, as neuroscience has proven time and time again, seeing results — even the achievement of small goals — motivates us to keep working toward them.
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