By Steve Cocheo
Executive Editor at The Financial Brand
Gen Z Wants Financial Direction from Someone Who Knows
Beyond wanting to save, Gen Z adults want to avoid revolving debt, in part due to the burden of student loans that they share with Millennials. Marous uses his own son, a Gen Zer, as an example of this generation’s norm. Even now that his son is at a point where he is using credit, he almost always pays it off quickly, says Marous.
“This generation doesn’t want to get into any more debt than they are in already,” Marous explains.
However, he continues, while they already desire to avoid credit card debt and save money, Gen Z consumers see themselves as needing to know still more about personal finance. “This generation is really looking for help,” says Marous, “and they want to learn how to make good financial decisions. And they want solutions that are proactive.”
An example of the latter concerns everyday spending.
“Gen Z doesn’t want to be told that they have made an overdraft,” Marous explains. As children of the digital age, they expect financial institutions to be able to help them in the present tense.
“They want to be told, ‘It doesn’t make sense for you to make this purchase right now, because you have a rent payment coming up’,” says Marous. For such interactivity, of course, that warning will come from technology, most likely in the form of some type of artificial intelligence. And that doesn’t faze them one bit. They have been learning, gaming and living interactively pretty much from the time they could walk.
This is because Gen Zers are the true digital natives, according to Wes Cobb, senior director, financial education, at EVERFI. He explains that while millennials love technology, many can remember life before their first computer and before their home became connected to the internet. By contrast, Gen Z only knows the age of the internet, ubiquitous wifi and life by mobile device. EVERFI’s own research indicates that 45% of Gen Zers surveyed admit to being online almost constantly.
Cobb says that Gen Z in America is 90 million strong — with an estimated $44 billion in annual spending power, between wages and allowances. But in spite of that huge crowd, the opportunity to connect with this generation won’t linger. Marous points out that this generation is just as comfortable with the idea of establishing their primary financial relationship with a fintech or a big tech as with a traditional financial institution. Many are already in the years when they establish key financial relationships.
“You’ve got to start now, before the window closes,” Cobb advises. He presented a series of ways to begin the process.
This article originally appeared in The Financial Brand.