While financial anxiety is nothing new to many older generations, the type of financial anxiety weighing on Gen Z is uniquely problematic — not only for the people suffering from the numerous detrimental effects but for the general world population, as well. Additionally, Gen Z reports greater general anxiety as a whole, specifically relating to the uncertainty of their futures.
Here’s the thing: within a short period of time, Gen Z will be the most financially powerful generation. By 2030, they’re expected to represent 30% of the U.S. workforce, and 27% of total global income. But this seemingly-promising future is feeling more and more out of reach for Gen Z, likely exacerbated by the emotional and economic whiplash of the pandemic. In early 2020, the oldest of Gen Z were poised to inherit a booming economy as they prepared to graduate from college and enter the workforce. Unfortunately, COVID-19 turned that dreamy future on its head, leaving soon-to-be graduates scrambling to figure out digital learning, virtual job hunting, and an increasingly problematic set of economic circumstances. According to a W1TTY survey published by Maddyness, 74% of Gen Zers are stressed about money management and, alarmingly, 50% say they generally avoid checking their bank accounts as a result of financial anxiety.
Some subsections of Gen Z experience more financial stress than others. Strikingly, 82% of 18 to 24 year old women surveyed reported that managing their finances causes major stress. That’s 8% higher than the average amount of Gen Zers who report stress around the same topic! One of the main reasons for this discrepancy is that boys and men are often afforded more financial education opportunities than girls and women. There is also a wide gap between white and minority levels of financial literacy, which directly correlates with the prevalent and disparaging socioeconomic gap between those groups. While it’s hard to admit that these types of divides are still happening in 2022, it’s unfortunately all too true and needs to be addressed.
What’s Causing These High Levels Of Financial Stress?
The recent state of the world certainly isn’t completely to blame for those alarming financial anxiety stats. The way that Gen Z has learned financial literacy (or rather, not learned it) is at the root of the issue. A recent Go Banking Rates survey of 1,000 18 to 24 year old Gen Zers highlights this issue, reporting that a measly 17.6% said they learned financial education in school classes. On top of that, the few students that do receive financial education in schools typically report the lessons to be boring and easily forgettable.
Conversely, 48% of Gen Zers reported learning about personal finance from social media, specifically TikTok and YouTube. While it’s fantastic that Gen Z is actively seeking financial education, it’s troubling that so many are essentially forced to turn to often unverified information on social media channels. While some of that information may be reliable and beneficial, without proper verification, users may not know if they’re getting adequate education or misinformation, which can have devastating consequences. Low or inadequate financial literacy is directly linked to high financial anxiety, and all too many Gen Zers find themselves in that exact position.
At this point, one thing is very clear: Gen Z has the lowest level of financial literacy and the highest levels of financial anxiety. Whether from a lack of information in school or from skewed sources online, this increasingly autonomous generation is not set up for financial success. Over the years, it’s become increasingly clear that Gen Z actually craves financial education, they just often don’t know how to obtain it, hence why they’re turning to social media — the digital world they’ve grown up in.
What We’re Doing To Lighten The Load
At Zogo, we’re doing everything we can to address these issues by facilitating high quality, low stress, rewarding financial education in a format Gen Z loves: an app on their phones. Having been raised in the age of technology, a digital, gamified version of financial education is proving to be a much more effective way to reach Gen Zers on this topic than in stuffy lecture halls. Combined with tangible rewards for learning new skills (such as gift cards to popular national stores where they can purchase essential everyday products), our model for improved financial literacy among Gen Z truly seems to be working so far.
Since 2019, we’ve gained nearly 700,000 users, the majority of whom are 13-24 years old. We’ve also recently reached 200 financial partners that work with us to further younger generations’ financial literacy and decision making opportunities. We’re bridging new technology with tried and true money management tactics and institutions so that, hopefully sooner rather than later, Gen Z has the financial literacy to responsibly wield their increasing financial power. Their success is directly linked to the success of our ever-in-flux economy and our futures. Zogo is so excited to continue bringing them the education they need and deserve.
Request a demo to learn more about Zogo and how we can empower your FI to financially empower Gen Z.