Although the exact year varies depending on the source, Generation Z includes individuals born within the span of 1995 and the early 2010s. Despite so much attention given to millennials these days (those born in the mid 1980s through the early 1990s), Generation Z is now beginning to gain attention as they age. Characteristics of this group include more smartphone use than millennials, a greater awareness of social and environmental issues than previous generations, and an estimated “$3 trillion in purchasing power” by 2020.
Helping today’s youth succeed is key when looking to improve the world for the future.
Since Generation Z will have a large amount of financial control in the next year or so, it’s crucial to provide the following financial advice to members of this youthful group.
Emphasize that college isn’t the right path for everyone
In recent years, millennials have especially felt the weight and damaging effects of student loan debt. Just recently, national student loan debt figures were reported to have “increased by $37 billion.” This brings the U.S. student loan debt balance to almost $1.5 trillion dollars. Even if you are discussing finances with a recent college student or graduate, emphasize the importance of assessing one’s career path before taking on additional loans. Whether you are speaking with a Gen Z high schooler or a college graduate who is considering going back to school right away, stress that higher education degrees are not the right option for everyone. While higher education is an absolute must for many, discuss other career paths that require less or no student loan debt as an option.
Have a conversation about the future of the planet
As stated earlier, members of Generation Z are keenly aware of the state of the planet. They are growing up in the middle of climate change debates, plastic bag bans, and the widespread adoption of residential solar panel use. Rather than focusing solely on 401Ks and investing with members of this generation, explain the financial ramifications of their day-to-day purchases. Discuss what it means to make eco-friendly choices with their dollars in every area of life. From paying an additional fee to recycle to buying organic, emphasize that real environmental change can be made with their buying decisions.
Discuss the importance of giving
In a consumer culture that often focuses on what the individual can buy to make his or her life more fulfilling, giving to charity and to those in need cannot be stressed enough. Because Generation Z is still so young, this is the time for parents, relatives, and educators to explain the importance of sharing one’s finances. If you have children who are part of this group, help them find charities to which they can donate a part of their allowance or part-time job funds.
Helping Generation Z become the most financially responsible generation on record goes far beyond basic financial management. In addition to teaching these young individuals about how to manage their personal finances, it is also necessary to discuss the ramifications of their buying decisions for the future.
by Jennifer Dawson