How COVID-19 Changed Gen Z’s View of Money
Many millennials view the 2008 recession as their introduction to the economy. Even so-called “geriatric millennials” were only in their mid-twenties when the Great Recession hit, while the younger ones were on the cusp of teenage years. It was an event that shaped their definition of money, as well as their careers as students and professionals – possibly lifelong. It’s no wonder they’re one of the most pessimistic generations when it comes to their finances.
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See: The surprising ways Gen Z and Millennials are financially different worlds
Likewise, the COVID-19 pandemic has shaped Generation Z. This new generation, aged 9 to 24, almost perfectly mirrors millennials in 2008. A key difference, perhaps, is that these “digital natives” Are constantly bombarded with news. world through technology and social media, which replaced person-to-person interactions in a year of quarantine.
The oldest of Generation Z has suffered the fallout from the Great Recession and COVID-19. In a remarkably difficult time to afford an education, find a paid job, or even think about buying a house, this crash course in economic insecurity will impact their perspective on money for years to come.
“Generation Z had a tumultuous upbringing, even more so than millennials. Their views on money were probably shaped by a sense of uncertainty and less of the sense of entitlement felt by generations past, ”said Jake Hill, CEO of Debt hammer.
With that understanding, here’s a look at where Gen Z stands on financial matters today.
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Generation Z is ready for anything
If you spend a lot of time in Gen Z-dominated spaces like TikTok, you feel like they’d be more surprised if the world does not have end in a fiery and cataclysmic catastrophe. This does not mean that they are an extremely pessimistic generation. But they have had to develop a realistic view of the world as very urgent issues like climate change and wealth inequalities threaten their future.
“COVID-19 has taught Generation Z the importance of being prepared for unforeseen events, especially financially. The loss of a job along with current income has taught many the importance of having savings to lean on. This principle has been brought to the fore in their minds, which is a milestone for this generation, ”said Jake J. Oyler, a 25-year financial advisor at Colwyn Investments.
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They are more financially aware than previous generations
While the majority of Gen Z have not yet finished school or left home, those who have entered their teens and adulthood are more money conscious than previous generations.
“All the trends indicate that Gen Z has become more financially prudent due to the pandemic,” said Chris Nddie, co-owner, RIC Clothing. “For example, makeup sales, which are often worn by younger customers, are at an all-time low.
“But it was planned. People turned to minimalism, frugality and economics on the back of the Great Depression. That was until the baby boomers started to spend freely.
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They recognize the importance of investing
Investing was once a subject reserved for Wall Street. Even as it spread beyond the ranks of the wealthy elite, it was largely confined to the elderly who had both the financial means and the know-how to make investment decisions. But in the age of technology, just about anything can be learned with a Google, and investments can be made in minutes on online brokerage platforms like TD Ameritrade and Robinhood.
“(Gen Z) took to social media for his time, where investing content was plentiful. The content inspired many people to invest the available money in brokerage accounts and learned that your money makes you money. Additionally, the on-going approach of investing ‘together’ in companies like GE and AMC seemed to inspire their generation to start investing, ”said Kelly Welch, CFP, Girard, a heritage division of Univest.
“It’s no wonder Gen Z invests more than the generations before them,” added Carter Seuthe, CEO, Credit Summit student loan refinancing. “Everything that has money is volatile for them; nothing that was planned worked as it should.
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They expect more from their jobs and their employers
Despite Gen Z’s apparent money and investment know-how, or perhaps because of it, many will not settle for mistreatment in the workplace. Even in the midst of economic and job insecurity, their standards for employers are higher than ever.
“COVID-19 has made everyone re-evaluate their relationship with material possessions and money, but especially with Gen Z. They were told growing up that they just had to work hard, study hard, and meet the good guys. people and that they would have a tidy job. for them. However, for most people this has not happened, even when they have done all the “right” things. Instead, Gen Z is likely to focus more on their own personal growth and have a job that matches that, rather than the other way around, ”said Matt Mundt, Founder and CEO, Hug Sleeping.
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This prioritization of work-life balance, especially during a pandemic, has boosted the popularity of remote working and flexible work options. In fact, a growing number of workers prefer to quit their jobs rather than return to work in an office. Companies that still cling to office dynamics may struggle to attract Gen Z workers, who will make up around 27% of the workforce by 2025.
“Gen Z adults are also disjointed. They don’t expect to be in a business forever, or even more than five years. They get what they can and move on. Unfortunately, that also means the gig economy is booming and Gen Z adults have fewer advantages than any other generation, ”Hill said.
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The age-old debate of “Live now” versus “Plan for the future” remains
Going through two recessions instilled a strong desire for financial stability in Gen Z. At the same time, it opened their eyes to how they don’t want to live – struggling to get by, locked inside for a while. year. This creates an interesting paradox: am I saving all my money for the future, or am I spending it on experiences that matter to me?
“If before the pandemic I thought that at the age of 30 I could buy a house, now I want to use that money to travel the world… COVID-19 has made life more short, and ( I) certainly don’t. I don’t want to take a house on the other side, ”said Miruna Necula, community manager, PhotoAid.
But the fear of instability causes others to question their financial futures and what they want them to look like.
“Now that it’s harder to find short-term or low-skilled work, I’m more concerned about my future. At 25, I want to feel financially independent rather than depending on my family for support. Now I understand how important money is because it can give me the freedom to make my own decisions and give me a sense of security, ”said Karolina Zajac, community manager, PhotoAid.
Maryia Fokina, Public relations and content specialist, Tidio, abstract : “I think COVID has changed our relationship with money in a number of ways, and the change is fundamental. On the one hand, the desire to save more money is very real: you never know when the next crisis will strike in this unpredictable world. On the other hand, I feel like most of us are turning to the ‘YOLO’ approach. Generation Z, like no other generation, is realizing the effects of climate change, irresponsible political demands and the ever-increasing impact of technology. So, many are joking (with a tinge of sadness) that there is no point in saving money now if our generation is unlikely to retire due to the climate crisis. COVID made those feelings even more real, and more young people started to “live in the moment” when it comes to money. “
Regardless of where a person sits on the savings versus spending spectrum, all of Gen Z has undoubtedly been changed by the pandemic. And as more and more of them enter the workforce and exercise power over the economy, what they have learned will change the country’s future.
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Last updated: September 15, 2021
This article originally appeared on GOBankingRates.com: How COVID-19 Changed Gen Z’s Perspective on Money