2 Gen-Z Habits That Make Saving Money Way Harder Than It Was For Their Parents
glassesshop | Unsplash Every generation gets accused of being bad with money, but Gen-Z is operating in a financial world that looks nothing like the one their parents grew up in. Between rising costs, student debt, and a shaky housing market, saving money isn't as straightforward as it once was. At the same time, nearly three-quarters of Gen-Zers say they expect to be wealthy someday, which raises an interesting question about how they're approaching their finances.
Gen-Z has access to more investing apps, budgeting tools, and side hustle opportunities than any generation before them. But having more options doesn't automatically make saving easier. In fact, some of the habits that make Gen-Z innovative with money may also make traditional saving harder than it was for their parents.
Here are the 2 Gen-Z money habits that make saving harder than it was for their parents:
1. Gen-Z invests their money instead of building traditional savings
One of the biggest differences between Gen-Z and previous generations comes into play with how they utilize and store their money. Instead of building a savings account or setting aside money for a retirement nest egg, Gen-Zers are focused on investing their money in ways that provide immediate gains.
For example, most Gen-Xers and even older Millennials see owning their own home as a way to invest their money. Yet, most Gen-Zers are utilizing real estate to build wealth in other ways.
This includes investing in rental property as well as newer concepts, such as fractional real estate investing and real estate investment trusts, which allow you to invest what you can directly into properties or companies profiting off the real estate boom. Furthermore, Gen-Z is highly enthusiastic about investing, but for the sake of retirement alone. Instead, over half of all Gen-Zers have funds invested in some sort of venture.
These investments vary between mutual funds, exchange-traded funds (ETFs), cryptocurrencies, and non-fungible tokens (NFTs). This holds true regardless of income status and gender identity. It’s likely that these dramatic shifts in investments are at least somewhat contributing to Gen-Z’s general outlook on their future wealth. They can see the future return on their current choices in where to place their money.
2. Gen-Z relies on flexible income instead of stable paychecks
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When Baby Boomers entered the workforce, they went in with the mindset of working their way up the career ladder and eventually being rewarded for their loyalty to a single company. However, that mindset rarely works in our modern world. So, Gen-Z has recognized this and adapted.
Unlike Millennials, who sought out careers in business and related fields, many Gen-Zers aspire to work in fields related to healthcare, education, or the arts. Gen-Zers aren’t as scared of things like student loans, which opens the door for opportunities requiring more time in school. This upfront investment will eventually pay off, and that’s what Gen-Zers are banking on.
Also, Gen-Zers are by far the most active members of the modern gig economy. In fact, most Gen-Z individuals who aren’t in college participate in freelance work or take up contract work instead of seeking out full-time, salaried employment options. What’s more, many of them seek out alternate sources of income through social media and other online options.
Gen-Z has definitely entered adulthood with a splash... but not in the way most people imply. In many ways, Gen-Z is poised to be one of the wealthiest generations to date. So, maybe it’s time we look at what they’re doing to earn and invest their money and take a page from their book for once. Who knows, it just might offer some hefty returns.
Megan Glosson is a mother, freelance writer, and editor based in Nashville, Tennessee. She enjoys writing on a variety of topics, but loves taking on anything with a personal connection to her own life. Her work has been featured on The Mighty, Project Wednesday, Thought Catalog, and MSN.
