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Gen Z author: Here's how previous generations affected our relationship with money

Ella Gupta is the 16-year-old author of the recently released "Gen Z Money $ense: A Personal Finance and Investing Guide." A high school student in North Carolina, she is also the founder of the Initiative for Financial Literacy Exploration (iFLEX) and a 2020 finalist and Power Pitch Winner in the International Conrad Challenge.

Her interest in personal finance and investing was sparked at 10 when she sold Rainbow Loom bracelets and invested half her profits in the stock market and donated the other half to a pet charity. Her goal is to democratize financial education so that everyone is empowered to take charge of their financial futures and live out their dreams.

As my peers and I age into adulthood, Generation Z — or Gen Z for short — is supplanting the focus once bestowed on millennials.

Bank of America predicted that Gen Z will be “the most disruptive generation ever.” Born between approximately 1995 and 2010, the generation wields sizable economic, political, and social influence.

As digital natives, we grew up with information a tap away. Still, our generation is not without financial concerns.

Here are some of our main concerns surrounding money that came from previous generations and how we are acting on these fears.

Ella Gupta, a high school student in North Carolina, recently released her book explaining personal finances to her generation. (Credit: Ella Gupta)
Ella Gupta, a high school student in North Carolina, recently released her book explaining personal finances to her generation. (Credit: Ella Gupta)

Economic insecurity

Gen Z grew up in the wake of the Great Recession, during which many Gen Zers — also referred to as Zoomers — watched their Gen X parents lose nearly half of their net worth. Then more than a decade later, the crushing COVID-19 pandemic swept the world, and Zoomers were often the first workers to be laid off or furloughed.

These events have coalesced to shape Gen Z's pragmatic relationship with money. According to the American Psychological Association, 80% of Gen Z is stressed or anxious about money. These fears, though, play an important role in how we navigate our finances. For instance, 77% of Zoomers are paying closer attention to their personal finances in light of Covid-19, compared to 69% of millennials and 57% of Gen X, according to a Vanguard 2020 survey.

Determined to make money work for us, many Zoomers are also taking on side hustles. From a young age we developed the understanding that money and circumstances can change in the blink of an eye, which has made many in our generation predisposed to prudence and frugality.

Student debt

The cover of Ella Gupta's recently released book on personal finances for Generation Z. (Credit: Ella Gupta)
The cover of Ella Gupta's recently released book on personal finances for Generation Z. (Credit: Ella Gupta)

Gen Z has money on its mind. This cohort watched millennials go through the student loan crisis. The $1.5 trillion of national student debt has not gone unnoticed by our generation. We have seen alarming headlines about millennials being burdened by and delaying key life milestones because of debt. The steadily rising cost of attending higher educational institutions only intensifies Gen Z’s anxiety surrounding debt.

Many Zoomers are taking measures to avoid large student loans. Sixty-two percent of Gen Z is setting money aside for higher education expenses, and 48% of Zoomers plan to work a part-time job during college. In contrast, only 36% of millennial said they worked part-time jobs.

Additionally, in a TD Ameritrade survey of Zoomers, 73% indicated that they chose or would choose a less expensive college to avert debt. Gen Z’s efforts are paying off; the financial firm found that this generation is on the path to taking on less student loans than millennials.

Securing retirement

(Photo: Getty Creative)
(Photo: Getty Creative) (Hans Neleman via Getty Images)

Gen Z can no longer rely on pension funds to finance retirement like our grandparents did, and if no changes are made to Social Security funding, those entitlement benefits will make up a smaller share of our income in our golden years than what baby boomers now have.

We need to make more savvy financial decisions to take charge of our own financial futures — and investing is one of those avenues. Although robo-advisors, automation, investing apps, and other innovations have made it easier than ever to invest, the financial landscape is more complicated than ever. And Zoomeers need to learn more about it.

The company Greenlight found that while nearly three in four teens did not feel confident or knowledgeable about personal finance, nearly the same share want more personal finance education. Eighty-six percent of teens are interested in investing, but nearly half have not begun investing due to a lack of knowledge and confidence. Gen Z desires to learn about money and make it work for us.

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