Navigating the world of personal finance is daunting for anyone, but it's a particularly pressing concern for members of Generation Z as they begin their careers and become financially independent.
Here's a breakdown of how members of Gen Z -- people 18 to 27 years old -- approach money, what factors influence their approach and what advice others have for those of this generation.
Key financial insights on Gen ZAmong Gen Z members, 47% say that money has a negative impact on their mental health, according to Bankrate's money and mental health survey.A significant 40% say they're either slightly behind or significantly behind on their retirement savings, according to Bankrate's retirement-savings survey.Across generations, Gen Z workers are the most likely (28%) to say they don't know how much they'll need for retirement, according to the retirement-savings survey.Nearly two-thirds (64%) of Gen Zers recently said they were likely to search for a new job in the next 12 months, according to Bankrate's job-seeker survey. People are also reading... 6 Illinois men arrested in ISP sting operation, accused of traveling to meet minors for sex in McLean County Illinois House speaker to Chicago mayor: Get ready to hear 'no' a lot in Springfield Bloomington to vote on 58-townhome proposal Flick Fact: Is the exodus of residents from Illinois continuing? IRS is sending out automatic stimulus payments Records reveal timeline before Mahomet slaying suspect allegedly threatened far-right streamer 1 injured in gunfire reported Monday night in Bloomington 3 from Bloomington die in deadliest U.S. theater fire Snow brings slippery morning commutes across Central Illinois Anchor man detained in McLean County, accused of supplying the cocaine that led to a man's death Bloomington shop specializes in 'wine for all' How a long-lost Bible found its way home to a Bloomington family Flick Fact: The B-N venue where top rock bands performed in the 1970s? Is the building still there? Monster Pawn owners charged with organized retail crime Bloomington man detained after police say they found 7 guns, 22 pounds of cannabis Sources of financial stress
As members of Gen Z enter adulthood and work toward becoming financially independent, they often take on big money- related challenges and responsibilities, such as:
Paying for college.Establishing a career.Establishing a budget from scratch.Starting an emergency fund.
For Gen Z, tackling these challenges can cause stress related to personal finance.
The top financial stressor for Gen Zers who said money concerns impact their mental health was paying for everyday expenses, which was cited by 52% of respondents in the money and mental health survey.
Gen Zers also have the increasing cost of higher education weighing them down. More than 13 million Gen Zers have a student-loan debt balance, according to the Education Data Initiative, which represents nearly 44% of the Gen Z population ages 18 and older.
Finally, regrets about not saving enough for emergency expenses are more likely to affect Gen Z than other generations, with 26% of Gen Z having these regrets, versus 21% of millennials, 16% of Gen Xers and 11% of baby boomers, according to Bankrate's financial-regrets survey.
Impact of high expenses
Achieving financial independence from parents is a considerable challenge among Gen Z as high costs of living continue to have an impact.
Significant expenses young adults face include high housing costs, with the median rent cost in the U.S. at $2,015 as of Nov. 30, according to Zillow. Another large expense is often food, with food prices climbing 2.1% over the year ending in October, according to consumer price index data.
High costs of living can also contribute to financial troubles for Gen Z, with 28% saying they live paycheck to paycheck, according to Bankrate's survey on living paycheck to paycheck.
Gen Zers might find themselves leaning on their parents for financial help. Bankrate's financial-independence survey found that among adults age 23 or older who say they receive or have received ongoing financial assistance from their parents:
49% have received help paying for housing.48% have received help paying for expenses such as groceries and utilities. Gen Z's money mindset vs. previous generations
Every generation approaches money with a unique perspective shaped by experiences and technological advancements. Here are some ways Gen Z members set themselves apart from their predecessors:
Tech-savvy entrepreneurship:
Gen Zers grew up in a digital age, surrounded by technology that has shaped their lifestyle and approach to money. Many Gen Zers can leverage technology to pursue their passions and even turn them into successful side hustles. According to Bankrate's side-hustle survey, 48% of Gen Z respondents say they have a side hustle, the highest of any generation.
Embracing digital banking:
More than two-thirds (67%) of Gen Z members have an online savings account at a bank with no branches, according to Bankrate's competitive-savings survey. Online-only banks are known for offering perks such as high yields and low fees.
More concern over job security: Half (50%) of Gen Zers who say money affects their mental health cite not having a stable income or job security as a factor, according to the money and mental health survey.
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