Why Gen Z sees money differently than other generations
- As the most diverse generation across race, ethnicity, and gender, 'Zoomers' are vocal proponents of diversity and inclusion.
- Here's why Gen Z sees and deals with money differently than their previous generations.
Understanding Gen Z goes beyond just the demographic details – there are specific habits, values, aspirations, and insecurities that define the generation.
As the most diverse generation across race, ethnicity, and gender, 'Zoomers' are vocal proponents of diversity and inclusion. They have come to not only desire, but demand greater representation in society, whether that be in school, at the workplace, or in the media.
Additionally, they have shown a greater degree of concern for social issues than any generation before. These values are directly reflected in Zoomers’ consumption habits, and increasingly, in the PR and marketing efforts of the brands targeting them.
Never before have consumer brands so vocally aligned themselves with social issues. It’s commonplace to see leading brands address issues like climate change, mental health and racial equality. Furthermore, as Gen Z enters the workforce, employers are also aspiring to align with those values.
To be fair, though, Millennials also had a role to play in this shift becoming a reality, as they’re digitally savvy like their Zoomer counterparts. However, Millennials still remember a time before the internet. Zoomers are going digital much earlier in their lives (around 80% of Gen Z had smartphones by the age of 12!)
As a result, Gen Z is the most "digital" generation there is. They spend an average of 8 hours a day looking at screens, but have an average attention span of approximately 8 seconds, and this reflects in their social media use. The most popular platforms they use are Snapchat, TikTok, and Instagram – in that order.
Gaming takes a big chunk of Zoomers’ time – around 87% report playing a video game at least once a week. Many say they enjoy video games because they help them experience a more idealized version of the world. This generation has been a catalyst for the gaming industry to grow into a $162 billion market.
Gen Z and money
What’s Gen Z’s relationship with money? Well, generally speaking, insecure. But Gen Z deals with that insecurity in a very different way.
For a generation that does not benefit from institutionalized financial education, financial literacy is surprisingly high on Zoomers’ priorities. They get the bulk of their information through social media – coining the term FinTok (finance + TikTok), from their parents, or through banks and other financial institutions.
Gen Z also banks differently – they hate going to branches. Most of their interactions with their bank happen through a mobile phone. In case of confusion, many of them would rather speak with a chatbot than go into a branch and speak with a representative.
That’s not to say human interactions are completely out of demand. They do like knowing there’s a branch manager available to them if they want to get a high-level understanding of their financial situation.
Finance, though, remains stressful for them.
The biggest financial concern for the generation is the cost of living and taxes. And as many don’t feel financially secure, they find themselves working multiple jobs, and anxious about ever being able to retire.
Gen Z is also spending money in ways much different than the generations that preceded them. They’re not using credit cards as much – Gen Z holds an average of 1.4 credit cards, compared to an average of 2 for other generations. Many of them can't get credit cards yet because they don't have credit histories.
That’s not to say Zoomers are not utilizing short-term loans – BNPL has become somewhat of a favorite.
Zoomers also became investors sooner than any other generation. This is partly due to the financial uncertainty they witnessed with the onset of the Covid pandemic.
Where do they invest? Crypto, more than any other generation.
The way Gen Zers access financial services differs from older generations. They have a high level of distrust of traditional financial providers, and place greater faith in internet platforms. They are more likely to attain services from a neobank or a digital lender, and find it easy and convenient to do so.
Becoming a Steez institution
With our knowledge and expertise, we have formulated a fundamental philosophy that helps an institution develop a Gen Z focus. A Steez organization is timeless, dynamic, responsible, and tech-forward.
Our Steez philosophy has three elements: the heart, the mind, and the hands.
Our five-part Steez podcast aims to enable institutions to become Gen Z-ready. We had the leading minds from the industry come together to help formulate a well-rounded approach to doing so. If you’re selling financial products to Gen Z, Steez is your one-stop-shop to understand how they think, what they want, and where their attention lies.
If this intrigues you, and you want to learn more, you can find our Steez guide and podcast here.