By Stefanie O’Connell
Millennials have monopolized headlines for nearly a decade, but as members of this generation age into their 30s, a new generation is quickly moving into the spotlight. Generation Z, roughly defined as those born between 1995 and today, make up a quarter of the American population.
Report findings suggest these young up-and-comers might be savvier than their millennial predecessors, financially and professionally. This next wave of young adults might be the start of a new, and possibly improved, fiscal reality. If you’re still asking yourself, “What is Generation Z?” read on to learn more about why they might be the most financially savvy generation yet.
GENERATION Z IS MORE REALISTIC
Where millennials were raised with the idealism of the “trophy generation,” Generation Z witnessed the chaos of the economic downturn in their young years and therefore developed their initial fiscal outlook from a practical point of view.
“Growing up in an uncertain economy and being raised by more frugal and skeptical Gen Xers has shaped a less entitled, more money-conscious generational cohort,” said Christine Hassler, author of the “20 Something Manifesto.”
Dan Schawbel, managing partner of Millennial Branding and author of “Promote Yourself,” agreed, saying, “Gen Z is more conservative with their spending habits than their millennial counterparts because they saw their struggles and don’t want to end up jobless, living with their parents.”
GENERATION ZERS ARE MORE INFORMED CONSUMERS
Generation Z was born into the Internet age, meaning they are better positioned than any other generation to comparison shop online and research products. In fact, 52 percent of Gen Z uses social media or YouTube for research purposes, according to Marketing Profs, a marketing education website.
“They are more likely to research products and services before making purchases and shop for clothes, books and electronics online,” added Schawbel.
In a survey conducted by Better Homes and Garden, when Gen Z respondents were asked how much they would expect to spend on a home, they gave an average response of $274,323, less than $1,000 off the actual median home value of $273,500. Overall, Generation Z prizes homeownership above going to college, marriage and having children, meaning they might be more inclined to tackle long-term financial goals.
GENERATION Z IS PRICE-CONSCIOUS
Gen Z’s price consciousness also makes them more wary of college costs. Ever rising student loan balances have notoriously plagued millennials, who were taught by their parents that a college degree was a guaranteed way to gainful employment. Generation Z, however, is looking to take a more mindful approach to their education.
In a survey conducted by human resource consulting company Adecco, 21 percent of Gen Z respondents said they were concerned about the price of tuition, compared to just 13 percent of millennials. Meanwhile, Gen Z appears to be averse to taking on any more debt than necessary, with just 64 percent considering advanced college degrees compared to 71 percent of millennials.
“Gen Z seems to be more practical in viewing college as a vehicle towards a job, which is where placement outcomes are highly influential in their cost analysis and higher education decisions,” added Joan Kuhl, founder of Why Millennials Matter.
GENERATION Z IS GROWING INTO A STRONGER ECONOMY
Despite recent market volatility and economic crises in the U.S., Greece and China, Generation Z is graduating into a much-improved economy, compared to millennials who graduated during the recession. According to a recent report by the Labor Department, the unemployment rate has fallen to 5.1 percent, nearly half the 10 percent that plagued young job seekers at the peak of the recession.
Through a combination of their own efforts and well-timed market conditions, Generation Z is poised to become the most financially savvy and stable generation yet.
Stefanie O’Connell writes for GOBankingRates.com, a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.