These young adults think differently. Generation Z’s mindset and behavior have become a new inspiration for future-oriented experts and entrepreneurs. They spend money and choose brands based on entirely different factors than their parents. Gen Zers saw the Great Recession in 2008, and they are here during the COVID-19 economic downturn. They are aware of money pitfalls like student loan debt, credits, housing challenges, etc.
What are their money habits? Obviously, they are much different than Gen Xers, Baby Boomers, and Millennials have. Brands across different verticals must be well-aware of Gen Z’s financial behavior to address their needs in the digital era. This growing cohort of consumers has started making an impact on business and finance from their birth.
They care about what your brand cares
Unlike Millennials or their predecessors, Gen Zers choose brands and banks based on trust, even if other companies offer lower prices or fees. The organization’s ethics and values are what makes Gen Z’s choice. They do care whether or not the company cares about its consumers and the common good. Gen Z’s mindset is about bringing change and improvement into the world, and they want to see the same aspiration from brands and financial institutions. New social enterprises and fintech startups that stand for financial inclusion are the luckiest to earn this generation’s loyalty and trust.
Mobile-first, but not mobile-only
For sure, Gen Z is the mobile-first generation. However, they expect not only to have banking on their smartphones, easily access money and seamlessly transfer funds. Members of Generation Z wait for much more innovation in financial services and need assistance in managing their finance better. Voice-driven financial apps, AI-powered personalized assistance, real-time financial health monitoring, automated investing and saving, crypto investing, and more. Finance is going to be fascinating, thanks to Gen Z’s impact and inspiration.
Money management geeks
They are generally known as the most financially savvy generation. From an early age, these young people start looking for ways to manage their financial issues on their own. Whether it comes to success at school, finance, or life, they are fiercely independent and competitive. This drive to move forward and be independent makes them more conscious and anxious about their financial future. According to recent studies, 72% of Gen Zers say they are stressed about money. Driven by ambitions about financial freedom and early entrepreneurship, they show heightened interest in personal finance management apps that allow them to save, invest and manage their money more easily.
They think twice before buying
The money anxiety trend brings with it personal spending regrets. Most often, Gen Z’s financial regrets are about food-related spending, dining out, on-the-go food or beverage purchases, and delivery services. Gen Zers do continue purchasing luxury things while making cuts on other spendings and prioritizing savings. However, they really think twice before buying anything. What does make them buy? They trust peer and family recommendations (85%), according to SmartBrief. 69% of them say they are searching for online reviews and recommendations of items that they are considering to buy.
Gen Z started opening retirement accounts
In 2020, the world witnessed the beginning of the Coronavirus Crisis and a lot of economic challenges. However, it was the year of paradoxes too. Although the United States faced a record-high unemployment rate, many people were able to save more money than ever before. The overall economic situation made Gen Z think long term and start saving for retirement. Today, members of this generation care about their financial future more seriously than before. Automated saving and investing features in finance management applications have become more popular compared to the previous year.
They try buying from small brands to support them
Gen Z is amazingly socially minded. Most of them try and encourage purchasing from small businesses to support them during the challenging economic times of the economic downturn. These growing adults have changed the influencer culture. They think brands and influencers should do something to help stop the pandemic, grow public awareness of health protection measures, and encourage socially responsible behavior. Fashionable imagery and elitism have quickly become dépassé. Gen Z values authenticity and empathy in all brand manifestations.
Personalization defines this generation
Generation Z was born at the age of personalization, and they naturally expect to have it integrated into their daily lives, shopping, and financial services. From this consideration, reward programs, personalized offers, well-targeted gated content, and personalized e-banking experiences do matter more than ever. Some brands use geofencing capabilities to remind customers who are near the company’s physical locations of offers, discounts, and sales. Also, brands can consider creating a plan to attract different age groups through gated content. For example, they could send personalized promotions to college students, graduates, and adults. Many Gen Zers say personalized offers make them feel rewarded.
Gen Z thinks having debts is bad, very bad
Gen Z individuals grew up witnessing Millennials with student loans, credit card debts and struggling with their mortgages. It much affected their financial habits. Today, most of them think that having debt is bad, very bad. Gen Zers try to pay off debts immediately by cutting expenses, tracking their spending habits, and exploring budgeting tips and tools. Although it seems positive because going into debt is often a bad financial decision, many Gen Zers are too much categorical to take any debts at all. Refusing to take even manageable loans and debts may work as a roadblock to making larger financial decisions like buying a car or house.
Wrapping things up
Gen Z is on track to be the most diverse and financially educated generation. Their needs and expectations can serve as a source of inspiration for innovation-thinking companies and banks that aim to address the needs of their consumers and grow financially even amid the COVID recession. We have a lot to learn from Generation Z. They do care about the environment, social minorities, and sustainable future. They encourage brands and financial institutions to become more innovative, empathic, and socially responsible. And we believe Gen Z is the power of transformation that will inspire people and businesses to build a better future together.