A Gen Z perspective on finances

I know what you’re probably thinking: what perspective could Gen Z possibly have on finances – aren’t they still kids, maybe in high school? Some, yes. But the oldest of us were born in 1996 and, not to burst anyone’s bubble but that means some members of my cohort are now 24 years old. As 20% of the US population, we are in the workforce, buying cars, and…adulting other adult activities ?‍♀️

Like most of my Gen Z peers, I am not married, haven’t become a homeowner, and don’t have kids – yet. But we’ve been watching, we know what’s ahead for us, and how it might be different than our parents and our Millennial older cousins. Me and my 67 million Gen Z friends here in the US are in a prime time of our lives right now for credit unions to engage with us and help guide our financial future success.

Credit unions are embracing how vital my generation is for their future success too, so let me share some relevant stats as well as my personal insights on how financial brands can really resonate with me and my Gen Z cohort.

Who is Gen Z?

Gen Zers are adventurous, business-minded and cause-driven. They are more financially responsible and globally curious than generational cohorts before them. These creative folks aspire to protect and seek out the world, to advocate for human rights, to protect the environment, and to connect and create in new and emerging ways. Gen Z believes in making the world a better place, they believe in governments and activism, and they connect with brands who share their values.

Many have called Gen Z entitled, but in reality they are doing their best to ensure companies  (and the world) are held to higher ethical and moral standards than ever before. Corporate social responsibility, values, mission and purpose are what matters to this group and if a company doesn’t measure up to their standards, they are consequently “cancelled.”

How does Gen Z think about money and finances?

Gen Z has observed the struggles of Millennials before them, and adopted an even more fiscally conservative approach. In a study done by Credible (right before COVID really hit), 33% of Millennials said that credit card debt was the top scariest thing in their lives. Gen Z wants to avoid this type of debt so they seek accounts and services that aid in that endeavor. Debit cards are top of their priority list for financial services followed by mobile banking. Over 50% haven’t entered a bank branch in at least 3 months.

As mobile natives, 69% of Gen Zers use mobile payments (such as Zelle, Venmo or CashApp) multiple times a week, according to Accenture. Because of this, mobile apps and online banking with easy and intuitive interfaces are not only expected, they are considered the bare minimum.

Gen Z has a strong appetite for financial responsibility and business. This is where companies like Ally Bank have really hit the sweet spot with their digital only financial services mixed with purpose driven messaging.

Some of their most common financial concerns – beyond the pervasive concern we all share during COVID of the economy and job market – are the rising cost of living, paying for college or paying off student loans, and having enough money to live independently of family.

According to a study done by Nerd Wallet, 41% of Gen Zers have anxiety about their finances and 30% feel self conscious about them. 68% use budgeting tools of some sort, with pen and paper being the top choice followed by online budgeting tools (ex. mint), and bank-provided tools following.

As much as Gen Z wants to be financially savvy, there are some commonly-held misconceptions in this group, such as a requirement to always have a balance on a credit card to build credit, or that having multiple credit cards is bad for your credit score.

While all of these statistics are broadly true of this generation, and reflect my own personal experience as a member of it, it’s also important to remember that this generation is not a monolith. Within Gen Z there are many different segments with different lifestyles, attitudes, and financial situations. To truly understand and appeal to this important demographic, credit unions need good data about their financial needs and lifestyle triggers, and they need the tools to use that data well.

Practical Tips for engaging with Gen Z

There is a big opportunity for financial education. Personally, I love when I am served a quick video ad that gives me free advice on how to do better, or an infographic leads me to a short article explaining how something works. This is a credit union’s opportunity to get in front of this young generation. Whether it’s through YouTube ads or a promoted video on Instagram, finding quick and catchy ways to get your name and story to us is key.

If an ad catches my eye (which usually happens on social media), I immediately go check out the company’s social media page or website to see what they are all about. If the company sparks interest or has a cool product, oftentimes, I will end up sharing the profile with a friend of mine so that they can also check it out. You don’t want to miss this opportunity to make a first impression, so maintaining your social media profiles with fresh content, and creating an enticing landing page are important.

Another way to engage Gen Z is to show that you care about the world we live in with your actions. Gen Z loves to see organizations giving back to the community, and this corporate action goes beyond giving money. A company that does this incredibly well is Patagonia. Patagonia has many causes that they champion, but my personal favorite is their Worn Wear program where they upcycle used Patagonia clothing items. Buyers can purchase, at a discount, used Patagonia clothing and gear that has been refurbished to be better than new. This adds two years onto the lifespan of the clothing item and helps reduce carbon, waste and water footprint. They advertise this program as not only a way to buy discounted products, but as a way that you can make a difference in the world – a double win. So make sure your core values are driving your brand actions in clear, creative ways, and also that you are telling that story so we know about it. My colleague, Cassie Woolhiser, recently wrote a piece on the power of Values Based Marketing, including increased stability for value-led financials, you should check it out. 

Next up: show your personality! As a Young Person™ I can tell you that a stodgy financial brand persona telling me what to do with my money is extremely unappealing. So let your voice shine through. BECU, the largest CU in Washington State and 4th largest in the nation, is amazing at doing this. When I was in high school and college, everyone my age wanted to bank with BECU because they were relatable and human AND had all the digital capabilities of the large banks. They made you feel like you were a part of something greater, not just something bigger. Another credit union that really embraces their unique brand personality is Frontwave Credit Union. Their CMO credits their strong brand as one reason they were able to pull together so effectively during the pandemic this year – you can hear more about that in this webinar.

Gen Z is in an important life stage right now. We are starting to need a financial institution that will help with that first car loan, first credit card and first personal loan. And we will be awesome credit union members over the whole course of our lifetime ahead – all we need is you to come to us as a guiding light to walk through life with us.