Gen Z Approaches Money Differently, Credit Unions Should Too
As more of Gen Z (now age 12 to 27) are entering the workforce, they are experiencing the challenges that come with managing personal finances. With abysmal education around finances, young adults have historically been left to rely on those around them for guidance – which too often leads to cycles of financial insecurity. With a front row seat to watching Millennials struggle with student debt and stagnant wages, Gen Z is now reevaluating their relationship to money, and redefining what financial success and wellness will mean to them.
“Gen Z works hard for their money – more than half work multiple jobs”
Over half of Gen Zers are confident that they will reach their financial goals. Perhaps this is because, contrary to what click bait titles want you to think, Gen Z works hard for their money – and more than half work multiple jobs at a time. Working a “side hustle” has become the norm, as a way to combat the stagnant wages. In addition, 44% of Gen Z is already using credit monitoring services to improve their credit scores. And, they seek out and crowdsource information about all aspects of finances, from creating and sticking to a budget, to investing (both traditional and crypto).
This generation plans to put themselves in a good financial position, and are already making strides in that direction.
Credit unions need to meet this generation where they are, and offer products and services that advance their goals – on their terms. The Gen Z mentality of making the most of what you have should be met with products of the same philosophy: high interest checking, free built-in budgeting tools, and free credit scores. Credit Unions should offer free webinars or podcasts that teach about financial basics. Paying off debt, managing bills, and learning how to invest are all challenging topics for financial newcomers.
“it’s not just what the topic is, it’s how the topic is presented”
But it’s not just what the topic is, it’s often how the topic is presented that will make the difference for this cohort. Financial institutions that offer jargon and legalese will fail to connect with Gen Z before the conversation even starts. This explains the rise in Gen Z “fin-fluencers” – social media influencers who specialize in finances and build their brand on helping people reach financial goals.
Gen Z is already taking active steps towards financial success and wellness. With their hard work ethic, drive to learn about finances, and willingness to seek out guidance and information, they are setting themselves up for a strong financial future. Credit unions have the opportunity to help lift up the next generation, by offering products and services that align with their values and goals. This includes providing more accessible and user-friendly resources on financial basics, in both the digital and in person space.
When it comes to connecting with Gen Z, credit unions need to find more creative avenues of connection. By recognizing the unique needs and mindset of this important demographic, credit unions can build long-lasting relationships with this important demographic and help them achieve financial success.
This article was first published in CUInsight.