As a Gen Z’er, your financial habits can inform your future.
Being in your twenties is a special time in life. You have the exuberance of youth, the excitement of new adventures, and the ability to get over hangovers with just a strong cup of coffee and a bacon, egg, and cheese breakfast sandwich.
The other part about being in your twenties may not be as fist-pumping cool, but it’s definitely very important. We’re talking about money! I'm sure a trusted adult has stressed the importance of learning how to set a budget and use your money wisely. While being a part of Gen Z means you are still on the other side of your thirties, you should set up a good financial foundation as soon as possible.
We understand it’s not always easy to know where to start, so we’ve assembled some tips and tricks to put you on the right path.
- Gen Z and the economy
- Figuring out finances
- Live life without FOMO
Gen Z and the economy
Gen Z'ers are the youngest economic power players today with many of them just entering the workforce. While they share a lot of similarities with Millennials, the generational gap has brought some stark differences. After the Great Recession of 2008, when many Millennials were coming of age, Gen Z was in line to inherit a strong economy and workforce. The pandemic threw a curveball and those economic prospects shifted. It’s possible that, as a result, they are the least likely to participate in investing. 36% of Gen Z currently have investments, compared to 45% of Millennials.
But fret not, dear reader. While your generation has suffered job loss and the future may have uncertainties, there’s still power in taking control of your money and financial future.
Figuring out finances
So what are the ways you can set yourself up for success? We think you should learn:
- How to budget: We’re sure you have your parents’ voices in your head telling you having a budget is the best way to stay on top of your finances. Put together a working doc where all your monthly expenses are listed against how much money you make. Budget apps like Mint or Pocketguard make it even easier to not go over what you allot for what you need and want each month.
- How to save: Putting money aside in a savings account may seem obvious, but it's not as easy as you think. Going over your budget may find you dipping into your savings. However, it is important to have a nest egg for an emergency, a big purchase, or a rainy day. The best way to painlessly ensure this is by using the 50/20/30 method where 50% of your money goes towards rent and bills, 30% goes towards non-essential fun stuff, and 20% to your savings. Have that 20% directly deposited from your paycheck into your account so you don’t need to lift a finger to put you on your savings journey.
- How to invest: Gen Z and investing money: two terms you usually don't get in the same sentence. But investing while the market is volatile is a great way to pick up shares at better prices. A good jumping-off point is to put money into a 401K account, usually provided by your employer who may match your contribution. Also, talk to a financial advisor that can help you put together an investment plan. If an advisor isn’t in your budget (ahem), apps like Goodbudget and Robinhood can guide you seamlessly.
- How to plan for retirement: Life can sneak up on you, and you don’t want to be in your golden years without having money to pay the bills and enjoy your life. Besides a 401K and a savings, look into accounts like an IRA which are designed for people 50 and older to contribute more money and can be used in conjunction with traditional 401K retirement accounts. Find out more on the IRS website.
- How to get insurance: You may not think having insurance is essential but we’re here to tell you it absolutely is (and it's not just because we’re in the insurance game ourselves). There are a plethora of insurance products out there that are all available to keep people safe and secure, from health to renters, car, and life insurance policies. Regarding life insurance specifically, getting a policy now gives you a higher chance of getting approved and locking in a cheaper rate. Generally, the younger and healthier you are, the more appealing you are to the insurer. Do your research to get a policy that works best for you and your loved ones. Wysh is a great product with flexible coverage that works with your budget. Check us out!
Live life without FOMO
No need to miss out on the fun of youth. You can still practice responsible financial decisions that will save you money and help you prepare for the next decade.
Skip the expensive coffee: Believe it or not, even saving $5 a day can make a dent in your savings. Make your fresh cuppa joe at home and put that money into an account or an investment.
Pack your lunch: While having a $16 salad (depending on where you live) can be a treat, making meals at home can save you hundreds of dollars a year.
Repurpose outfits: Peruse your closet and do a little shopping. Certain pieces and outfits can be reworked for any season. Not only will it save you money, but it’s also better for the environment.
Get a side hustle: If you have the time and energy, getting a second gig can help you pack even more of a punch to your savings. Using the above tips can collectively help you be financially independent in your later life. Your twenties are the perfect time to start putting these smart financial practices into play. Saving money, having a retirement plan, and life insurance can set you up for your thirties and beyond.