Born in between the years 1996 and 2012, Generation Z, also known as the centennials have begun to acquire a clear stance over their financial independence. Taking on the dusty might of this tough financial world, they have managed to build a significant sum of wealth for themselves, leaving the rest of us in a perceptive wake. Thus, when it comes to monetary affairs, dismissing them as uninformed youngsters simply do not stand viable.
The post-millennials, as we would often call them, do not remember a time before the craze of the internet or social media and even this catastrophic climate change happening all around. Moreover, the current times are one of a serious global pandemic, inviting with it recession and financial crisis. Despite all this, Gen Z has surpassed expectations when it comes to money.
Who Says The Youth Are Not Responsible?
With the crippling economy, piling student loans, high costs of the household, they have successfully debunked this myth, thus becoming the new face of extreme financial power.
Over the years, the financial habits of Gen Z have been closely studied. Being surrounded by expensive gadgets and smartphones, they are more prone to spending in the consumer market. They are also monetarily savvy, constituting the native digital generation who prefer online shopping while also expecting the same to translate to physical stores. The quality of the product values to them more than brand loyalty, although their preferences change. However, they never forget to carry out a detailed evaluation of their purchases. Their frugal choices largely influence their lifestyle and spending habits, which is strategic as well as practical.
When it comes to earning, Gen Z is extremely cautious in planning for their future. They are interested in learning how to save and not overspend on extravagances. They start searching for jobs or paid internships quite early in their career. Education is the end of all their financial problems. Hence, they concentrate on building a constructive set of personal skills, which will be valuable to employers. Moreover, having observed their elders who have had to mitigate many challenges because of the stagnant wage growth and flattering economy, the centennials have developed a clear mindset when it concerns obtaining monetary independence and stability.
Economic recovery is their focus, so they wised up. Credit management has become one of its core responsibilities and tackling financial insecurity a major goal. In terms of dependency on parents for money, Gen Z calls themselves woke, considering it ordinarily cool to rely on them for some monetary support or the other. Since, in India, moving out of the parent’s house after 18 years of age is very much a foreign concept; centennials have absorbed this, managing to find independence within this pattern itself. At a place where food is free, laundry is done on its own and electricity bills need not be paid separately, it is the ideal way to save up money for future use.
Several studies in India have shown a considerable level of financial excellence in this generation, with full awareness about budgeting and financial literacy. The trends, which have been established, are as follows –
- Gen Z withholds a debt centric approach towards finance, being excessively proactive in addressing their issue timely and also making sure that it is avoidable in the near future.
- They successfully balance security of money with personal fulfilment, both in regards to the choices in life and career. While also understanding the need for financial sacrifices, they work hard to bring dynamic changes and set the balance right.
- They prefer taking advice from financial advisors.
- Socially responsible investment interests them too often.
However, rampant financial mistakes are also a part and parcel of their daily lives. Sometimes, they allow their debts to pile up which later becomes difficult to cope with. A lot of the Gen Z members do not have an emergency or rainy day fund. Consequently, they fail to handle unpredictable expenses and end up pulling out money from their savings account. Lifestyle inflation is a common problem among them.
How Can Gen Z Get Out Of These Problems?
Centennials often spend at the same rate in which they earn. This paves way for a tightening situation, taking the focus off the bigger picture. Besides, they also lack a robust plan for maintaining health care costs, are mostly clueless about investing in the stock market and have no fixed retirement financial schemes as well.
Money regrets are a sharp, piercing tang. Gen Z should learn and adhere to confronting these serious financial problems. Spending has to be done in a responsible manner. To tackle tumultuous times, prodigal spending has to be curtailed. Setting fruitful goals is key. Like their US counterparts, Gen Z in India should also feel motivated and optimistic when it comes to organizing financial resources.
Being rich or not should never be a deciding factor for one’s happiness, rather the approach towards finances is what can help them yield productive results. Once they start investing in an actively managed portfolio, the different financial institutions will show interest in capturing their business ideas. Indian companies should also pay more attention to their corporate responsibility instead of risking the alienation of their purchasing power.
Boosting their financial sustainability and entrepreneurial attitude will serve the economy in a positive manner. More avenues should be opened so that they can adequately manage their credit scores, loan and debts without going through financial anxiety. Gen Z deserves this independence for the longest run.