Gen Z seems to have its own unique approach to spending and saving money. Despite facing economic challenges like high living costs and a competitive job market, many still prioritize budgeting and long-term financial goals. Jenna, a 26-year-old buyer from Cincinnati, Ohio, earns $64,000 annually.
She prefers shopping locally for groceries and puts a significant portion of her income towards retirement savings. Although she doesn’t own a house yet, she’s considering going back to school and possibly relocating. Jake, a 28-year-old customer service adviser from Seattle, Washington, earns $33,600 annually.
He shares expenses with his wife and saves for emergency expenses like car breakdowns or vet bills. They avoid keeping large amounts of money in a savings account due to the temporary and seasonal nature of his income. Mark, a 26-year-old data scientist from Raleigh, North Carolina, earns $72,000 annually.
His high expenses are partly due to frequent travel to the UK to visit his partner. Despite a good salary, he finds it challenging to save enough for a down payment on a house in a desirable area.
Unique Gen Z saving strategies
Anna, a 22-year-old part-time teacher and writer from Washington, earns about $8,400 annually. She lives at home with her family, avoiding rent and utility expenses. Anna doesn’t follow a strict budget but tracks income and expenses, adjusting spending as necessary.
These stories showcase the diverse approaches Gen Z takes towards money management. They balance thriftiness with occasional splurges and set unique savings goals for the future. According to a 2024 Vanguard report, 20% of Gen Z is already saving for retirement, contributing to 401(k) plans at higher rates than millennials did when they first entered the workforce.
Financial experts attribute this to policy changes and technological advancements. However, a recent Credit Karma poll found that 49% of Gen Z feels “planning for the future feels pointless,” leading them to spend more freely. Factors like economic instability, high student loan debt, and housing market challenges contribute to this sentiment.
The “buy now, pay later” culture has also grown significantly among young adults. To strengthen their financial footing, experts suggest Gen Z should set realistic short-term and long-term financial goals, create a budget that includes savings, and seek financial advice from trusted sources. By doing so, they can work towards achieving financial independence and security later in life.
