In the face of an uncertain future, actively engaging in climate change initiatives, and advocating for racial equality, Generation Z stands out as a transformative force in today's society. These young individuals aspire to achieve financial stability amid the unpredictability of the world, and their values significantly influence their financial choices.
For those belonging to Generation Z, typically aged between nine and 24, being perceived as a disruptive force in today's society is not uncommon. Characterized by an environmentally conscious lifestyle and a heightened focus on social and racial equality, Gen Z is also often associated with concerns about future financial stability. This article delves into the essence of Generation Z— who they are, their worries, and how they navigate financial decisions.
Understanding Generation Z:
Generation Z encompasses individuals born roughly from the late 1990s to around 2012, placing the current age range between nine and 24. Termed the 'zoomer' generation, they have grown up in a world characterized by constant technological advancements and easy access to the internet. This accessibility has fostered a global perspective, making Gen Z known for their acceptance and open-mindedness.
Key Worries of Generation Z:
Racial Equality: Ipsos research in 2017 indicates that racial equality is a top priority for Gen Z. The positive impact of diversity resonates with them, and they actively seek to address inequalities and injustices in society.
Environmental Concerns: A 2019 Amnesty International survey highlights climate change as the most pressing global issue for Gen Z. Their awareness of the environmental impact of industrialization and a throw-away culture fuels a desire to take action.
Economic Stability: The ongoing uncertainty due to the COVID-19 pandemic has led to a widespread desire for financial stability. Financial vulnerability has increased among Gen Z, and they face uncertainties about future earnings, especially for those whose education has been impacted.
What Drives Gen Z's Financial Decisions:
Gen Z's financial decisions are strongly influenced by their worries and values. They are inclined to align their financial choices with ethical concerns, from daily expenditures to long-term financial planning.
Ethical Spending: A 2020 study by First Insight, Inc. indicates that 73% of Gen Z respondents are willing to pay more for environmentally-friendly products, a rate unmatched by other generations. Sustainable retail practices are also in demand.
Secondhand Market: Gen Z exhibits a thriving interest in the secondhand market, with platforms like Depop attracting 90% of its 30 million users who are under 26.
Long-Term Saving: HSBC's 2019 survey reveals that 72% of Gen Z individuals would choose to save £1,000 if given the opportunity, emphasizing their focus on financial stability.
Learning from Social Media: Gen Z often turns to social media platforms and influencers for financial guidance. The Financial Conduct Authority (FCA) has cautioned about potential risks associated with younger investors influenced by platforms like TikTok.
New Investment Approaches:
Gen Z shows interest in non-traditional investment avenues. Research commissioned by NerdWallet suggests that almost a third of 18- to 24-year-olds would prefer cryptocurrency investment over saving into a pension, despite the volatility and lack of regulation in the UK crypto market.
Challenges and Future Trends:
While Gen Z leans towards eco-friendly choices, the contradiction arises in cryptocurrency investment, known for its significant environmental impact. The challenge may lie in finding environmentally sustainable approaches to cryptocurrency investments.
Moreover, there is a rising interest in 'green' banking and sustainable investments, reflecting Gen Z's commitment to ethical financial practices. Triodos Bank's success in marketing sustainable financial products and the popularity of ethical investments hint at a potential trend among Gen Z.
Generation Z's financial decisions are intricately linked to their worries, values, and the evolving landscape of financial options. The intersection of ethical considerations, social media influence, and unconventional investment choices characterizes the financial journey of Gen Z.