New Financial Habits
How the young are changing their financial lifestyle
Coronavirus messed up the plans of all age groups, from boomers to millennials. But does it really affect the youngest generation that is quite flexible in thinking and truly digital savvy, especially, their financial habits?
In brief:
🤔💰🤓 Zoomers tend to spend more than earn, but the coronavirus crisis made them think of saving money.
📱📉🙄 Being digital savvy, Gen Z doesn’t trust in cryptocurrencies and any other easy opportunities to earn money. They mostly prefer tangible goods to intangible ones, etc.
😥📝❓Zoomers will create new, cross-functional professions, as they worry that their current jobs will undergo major changes.
According to McKinsey, Generation Z is identified as an age group born from 1995 to 2010. Business Insider claims that those who belong to this group came into being in 1996 and later, and Pew Research argues with both opinions, naming as zoomers people born after 1997.
Nevertheless, the age frame doesn’t play an essential role in the Generation Z characteristics. As Daria Fokina, a founder of the Z-board project and the Gen Z counselor, says, the rightest criteria for identification of zoomers is their personal formation and maturity together with digital technologies evolution. Therefore, the formal timeframe for this generation cannot be established due to uneven paces of development in different countries and even regions.
According to CNBC, 57% of zoomers don’t know how much money as a precaution they have. To this end, one of the recent investigations has shown that among Generation Z there is the highest rate of people without any savings (59,3%). But there is an exception to every rule. For instance, Margarita, a Polish journalist, currently living in Munich, saves money since she could remember.
Being a kid, I collected all the money gifts given to me by parents, relatives and family friends and saved them during the year. The only time I spent money annually was New Year’s Eve. That time I’ve always bought amazing gifts to my closest friends and family. Especially to my Mum, as her birthday is on 1th of January.
Margarita, a zoomer freelancer from Poland
Thus, almost all zoomers (77,2%) are unanimous considering savings as money for rainy day and claim it helps to live a better life in the future.
For nearly a half of Gen Z representatives (41%) the main source of income is their salary, but 27% of total revenue stream comes from their parents or relatives. For example, Stephan, a bioinformatics student, born in Russia and living for the last two years in Munich, learnt how to become completely independent from his family after relocation.
I now have a job and became financially independent from my parents. I’m spending quantitatively more than I used to, but I am also more conscious about the recurring payments like health insurance, shelter etc. I guess the baseline is: I allow myself more financially compared to my teen ages, but nevertheless worry more about stable income that I used to.
Stephan, a zoomer student from Russia, moved to Germany
Gen Z are big spenders and live life to the fullest measure, going out to cool clubs, fancy cafes and hipster bars. That is the consequence of stable economic situation, which has been following zoomers during their adolescence.
According to Emily Holbrook, a senior director of planning at Northwestern Mutual, for CNBC, zoomers haven’t been in the situations and financial goal commitments that would have maybe triggered managing their savings initially, like buying a home, getting married or thinking about offspring.
I’ve always bought more than I really needed. For example, two similar blouses in different colors or jewellery that I’ve never worn then. But now I learn how to make choices and to listen to my parents’ advices, even if I do not like them at all. Right now I’m thinking of becoming a babysitter after the lockdown is over.
Sophia, a zoomer schoolgirl from Germany
Most of zoomers take their parents’ and relatives’ financial advices and ignore the financial podcasts or opinion leaders. For example, Christina listens to the views of her grandparents, uncles and elder brother, Stephan tries to build his economic behaviour on his own.
The only exception is Margarita: she works as a business journalist, therefore, her attitude to finance often changes after interviewing successful entrepreneurs. For example, Margarita is now thinking about investing her own money in developing projects or creating her own business to not just keep saving money, but to act with it.
The coronavirus crisis is the first global shock that most of the youth is experiencing right now, not only in terms of lockdown, remote work or studies. It is also the first-ever potential threat to their psychological and financial stability and nearest future.
Nonetheless, Christina, a young dancer from Greece, has already faced a huge recession in her home country, and she learned to save money in advance.
The fact that in the country I live the financial situation is getting worse, made me think a lot more about finance than before. I understood that I shouldn’t spend a lot of money to things that aren’t that necessary and I try to be more careful with my expenses.
In the current situation I don’t buy any unnecessary things like clothes or shoes especially now that my dad can lose his job. I can’t afford the chance to be “a big spender “, but sometimes when I really want something, I save money and buy it then with the parents’ help. I’m also not a cheapskate, so I’m somewhere in the middle.
Christina, a zoomer schoolgirl and dancer from Greece
As for alternative ways of saving money, such as passive investment or cryptocurrencies, most of the interviewees seem to be skeptical or even unfamiliar with these instruments.
My studies did not give me the impression that any of that can be really that passive as they seem. Arguably one would spend his mental health for maintaining crypto investments, watching exchange rates. I am distrustful towards people promising you more money for paying money (why wouldn’t they grab this more themselves?).
Stephan, a zoomer student from Russia, moved to Germany
I haven’t studied topics like that, but I see some teens behave like that in my everyday life. No, I’m not one of those kids. I prefer spending my time and money in more creative things like hours in the dance studio.
Christina, a zoomer schoolgirl and dancer from Greece
I’ve worked in the media outlet about cryptocurrencies and blockchain. I haven’t held any crypto yet, as I didn’t have enough trust to this instrument. I’ve even written a Bachelor thesis about it! Currently I’m thinking of learning how to invest, but I’m more into the sphere of venture funds and angel investments, not passive ones.
Margarita, a zoomer freelancer from Poland
Maybe I have heard about some of these things, but I have never wanted to try any.
Sophia, a zoomer schoolgirl from Germany
The attitude of zoomers towards career path is also quite different from other generations, says Daria Fokina. It becomes cross-functional: a doctor blogger, fitness trainer and podcaster in one person or a bartender coach are real professions that young zoomers are likely to choose. According to LinkedIn research, 59% of zoomers claim their current jobs won’t exist in the same form in the next 20 years, and 77% of them are stressed out about work.
Sharing professional knowledge in social media and educating others also becomes a norm and a competitive advantage of this generation. Zoomers prefer not to get stuck in one specific job. At the beginning, they might change jobs 2–3 times a year, henceforth — every 3–5 years.
For example, in the last four years Margarita has already changed more than 10 working places and decided to switch from journalistic field to business management for her Master degree. Stephan seems to be more concrete in his career choice: right now he is studying Bioinformatics and plans to deepen his knowledge then in Neuroscience field.
