Financial planning for Generation Z

At Continuum, we see all our clients as individuals, with their own needs and circumstances. However, when we look at market trends, it can be helpful to look at generations.

The latest generation to reach adulthood is Gen Z, typically aged between 18 and 22 (Generation Z refers to those typically born in late-90’s to mid-2000’s)

If you are in Generation Z yourself or are the parent of someone who is, we look at the financial challenges you might face – and how we at Continuum can help answer them.

An online generation

Members of Generation Z have been brought up with social media and the internet, and as a result may be surprisingly financially aware.

According to a recent study by peer-to-peer lender Zopa, more than a third of ‘Gen Z’ has at least £1,000 squirrelled away. Some of course are still in full time education, but whether they have started earning many are already seeking to take control of their finances, more than 40% take the view that saving is fundamental for their future.

This is surprising, particularly if you are a parent of a Generation Z son or daughter. It flies in the face of commonly held views that the younger generations don’t see the point in saving. However, as confirmed technophiles, Generation Z is never without its smartphones, and can see the impact of every financial decision they make on their bank account. The survey showed that 70% of Gen Z check their finances nearly every day, mainly with a phone app. This is something that we understand at Continuum. We have an online Personal Finance Portfolio  app which can put not just everyday finances but all types of investment at your fingertips.

However, there can be a problem. Although most members of Generation Z recognise the importance of saving, they may not know the best ways to go about it – while the constant awareness of exactly how much in their account may actually result in anxiety. According to new research at NatWest around half of 18-24-year olds are more concerned about their finances this year than they were in 2018, compared with just 38% of 55+ year olds who said they were worried about their finances in 2019.

More than a third worry about not being able to afford their social life and around a quarter say FOMO (Fear of Missing Out) drives them to go out to events they can’t really afford.

Saving can be a problem

Although some of generation Z have started putting money away, 44% say they can’t save. 20% of 18-24-year olds confess that they have used their overdraft to fund their social life, and 22% complain that the pressure to spend, coupled with steadily rises prices mean that they can’t see how they will be able to start putting away money for milestones like a deposit for a first home.

But some things have not changed. Despite their financial awareness, Generation Z is no more likely to discuss finances with parents than previous generations.

At Continuum, we want to help.

Let’s talk

Talking about money worries is proven to have a positive effect on anxieties. Talking to an expert like a Continuum Adviser can therefore be particularly helpful: As finance experts, our team can provide answers to all types of financial questions, helping people of all ages to make better financial decisions. Introducing us to your Generation Z offspring might be a big help with their peace of mind and general wellbeing as well as their finances.

We can introduce some essentials of money management – the basics which can help ease financial worries now and help build a foundation for financial stability for the future.

This can include how to draw up a monthly budget, how to spot the money traps that are draining available cash and starting to look at the financial products that can help. A bank account that offers a free overdraft might be one possibility. A linked savings account might be another. We believe that it is never too early to get the saving habit, that everybody could and should have savings, and that it can be possible even when cash is tight.

We can also talk about the future – and why it could be a very good time to start on the essentials like a pension and tax-free savings and investment.

So, if you are from Generation Z, or know someone who is, get a financial conversation started now by simply calling Continuum.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

The Financial Conduct Authority does not regulate deposit accounts and personal finance.