As America’s economy expands and society advances, Generation Z, which includes those born after 1996, is gradually transforming the nation’s financial state. Zoomers, as they are referred to, have a different approach to money than millennials and their parents. They have seen previous generations’ mistakes, and, especially with more technological research, Zoomers have a plan to secure their finances at a young age.
A national study conducted by Business Insider found that 60% of Zoomers viewed price as the largest factor when determining to buy clothes instead of brand loyalty or other influences. It is evident that Gen Z is aware of financial struggles, and many are planning ahead to avoid such burdens. In fact, in 2018, research revealed that nearly half of Gen Z used their phones in stores to ensure they were receiving the best deal. Their frugal and budget-conscious attitude towards money differs from previous generations, such as millennials and their overspending.
Debt Stems from Student Loans
For the older end of Gen Z, their main source of debt is student loans, making their average debt to be $14,700 in September 2019. Zoomers are more frequently taking finances into consideration as they make decisions for their education. In fact, three-fourths of Gen Z believe that college is not necessarily the next step after high school. Instead, they argue for internships and apprenticeships to build experiences and practical skills.
However, for those who choose the path towards college, Zoomers anticipate the financial struggles that come with education: 66% plan to attend in-state schools to save on tuition, and 19% plan to live at home or commute to budget expenses, according to Visual Capitalist.
Mobile Payments Reign Superior
As society progresses, our nation is increasingly relying on cashless systems, mobile purchases and contactless payments instead of the use of cash or credit cards. Especially with the growing online market, applications such as Venmo, PayPal, Apple Pay and Google Pay reside in the phones of millions of Zoomers across the country. Specifically, Business Insider found that over half of Gen Zers use digital wallets, and over three-quarters use other digital payment apps monthly.
Not only are these alternative payment methods fast and easy to use, but they are also more secure, with less risk of hacking. One-third of millennials have faced credit card fraud, and it is a possibility that Gen Z is attempting to avoid those same costly mistakes. Although nearly 50% of Zoomers do have credit cards, the speed, convenience and security of digital payment resources have resulted in the widespread popularity of mobile wallets and in-app purchases.
After witnessing their parents’ economic struggles in 2007 and 2008, Zoomers have made the conscious decision to prioritize their finances. Beginning their financial research at just 13 years old, Gen Zers are taking price, student loan debt, various payment methods and more into consideration when scrolling through online stores and deciding to purchase the latest technological gear. Their influence within the economic sector is evident, and Zoomers can be viewed as fiscally responsible for the progress of our nation’s wealth.