The final installment in our series of money mistakes by generation takes a look at Gen Z. They’re new to adulting, but they’re already making some of their own mistakes, so let’s take a look and see if we can set a few assumptions straight! In case you missed them, here are the articles about Baby Boomers, Gen X, and Millennials.
Here are Five Fast Facts on money mistakes by Gen Z:
- 🤔 Who Is This? Gen Zs were born between 1997–2010. They are the freshest meat in the workforce freezer, and just starting to make their way in the world.
- 🚶 Where In The Journey? This generation is the first to truly know nothing else besides being constantly connected to everyone around them…through a screen. They’re just starting their careers and often have huge school loan debt, though they are more investment-minded than some older generations.
- ⛔ Assumption #1: Just Say No (To Debt) - Debt is generally not a good thing. But not all debt is bad debt, and aggressively paying everything down isn’t necessarily the right way to go. The correct strategy is to pay down high interest debt at a rate that doesn’t put you in an unreasonable crunch on a weekly or monthly basis. Target anything above 7% first…but only after you have a few months of cash stashed away.
- 💻 Assumption #2: There’s More Than Tech - Investing in what you know is also generally good advice. However, there are a lot more stocks and investments out there than Apple, Google, and Microsoft. Tech investments tend to be more volatile, so look more at diversified portfolios across multiple industries, or even Exchange Traded Funds (ETFs) to help stabilize your returns over time.
- 👍 Assumption #3: There Will Always Be Jobs - While this would be great, it’s not true. Many Gen Zs started joining the workforce as the pandemic gave way to huge demand because everyone was sick of being shut indoors all the time, and that meant high paying jobs were easy to find. That wasn’t reality and recent months have proven it out. Keep an eye toward constantly re-evaluating your job skills, look for opportunities to make yourself better, and keep up with the market value of the job you want. That way, when the right thing comes along, you’ll be ready to grab it.
🔥Bottom line: As with the other generations, these tips will work better for some than for others. But, the earlier you can learn good money habits (and avoid money mistakes), the better off you’ll be! Position yourself for good Paychecks early on, and you’ll most likely keep growing them throughout your career.
What’s the one thing you’d tell a Gen Z (or your younger self) about managing their money?
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