One of the most important parts of growing up into adulthood is learning how to manage your money, and Gen Z is carrying on that tradition. Just like their impact on other aspects of pop culture, Gen Z young adults are reshaping the world of personal finances with social media trends and new vocabulary.
The Gen Z age cohort is defined by Pew Research Center as being born between 1997 and 2012. The oldest members of Gen Z are turning 27 this year, and many are going through the financial challenges of young adulthood: starting careers, managing credit cards, and maybe saving money to buy a home or invest for retirement.
Many members of Gen Z have a gloomy attitude about their personal finances. Having come of age during a pandemic, economic crisis, and high inflation, 25% of Gen Zers are afraid they will never be able to retire. By coining new money catchphrases and going viral on TikTok by complaining about budgets, Gen Z people are learning how to make sense of the financial world and finding their place within it.
Let’s look at a few of the biggest Gen Z finance trends and catchphrases.
1. “Cash stuffing” — a good strategy to save money
Most people think of Gen Z as tech-savvy digital natives who want to do everything via mobile app. But many Gen Zers like to save money the old-fashioned way: by handling cold, hard cash.
“Cash stuffing” is the Gen Z nickname for the envelope method. It’s about setting specific spending goals each month, and then assigning a fixed amount of cash for each purpose.
You might have separate envelopes of:
- $800 for groceries
- $300 for nights out with friends
- $200 for gas/transportation/extra car costs
- $200 for clothes
- $150 for a vacation fund
By putting cash into a few budget categories of envelopes, you can (ideally) better control your spending. Seeing a stack of bills in an envelope can also help you clearly visualize how much money you have left to make it to the end of the month.
2. “Soft life” — antidote to “hustle culture”
Gen Z has been through a lot in their young lives. Many saw their high school graduation ceremonies canceled by COVID-19, had their college years made awkward by social distancing, and entered the job market during tech layoffs and economic uncertainty.
This gloomy era has made many Gen Zers skeptical about career ambition. Instead of the hustle culture of entrepreneurship and working as hard as you can for as much money as possible, many Gen Zers are choosing the “soft life” — with the goal of better work-life balance and living for today.
3. “Doom spending” — retail therapy for the end of the world
Whether it’s the pandemic, high inflation, global wars, or climate change, Gen Z often feels as if they’re coming of age during a time of upheaval, disaster, and existential dread. To cope with the stress of the economy, Gen Zers sometimes practice “doom spending” — where they spend money that they don’t really have, because they don’t feel the future is worth planning for.
If that sounds too dark and pessimistic, keep in mind that 41% of Americans have less than $500 of savings. A recent survey from Intuit Credit Karma found that 27% of all Americans have admitted to “doom spending,” and 96% of Americans are concerned about the economy.
4. “Loud budgeting” — a declaration of boundaries and financial independence
The personal finance news for Gen Z is not all negative. One young TikTok comedian named Lukas Battle went viral with his idea for a new concept called “loud budgeting.” Instead of spending money on “quiet luxury,” or worse, suffering in silence while racking up credit card debt, loud budgeting is the idea that you should clearly announce your intentions to save money and defy expectations that the only way to have fun is to splurge.
Loud budgeting is a powerful concept because it could help people set clear boundaries. If you don’t want to go out and spend $100 on dinner and drinks with friends, you should be able to say that. If you would rather have $1,000 in your bank account than buy an expensive handbag or attend a destination wedding that you can’t really afford, loud budgeting lets you declare your intentions.
5. “Money dysmorphia” — your personal finances might be better than you think
Some Gen Zers have plenty of money, but still feel financially insecure. They worry they’re not doing well enough financially or haven’t saved as much money as they should for their age, even if they’re doing fine!
This disconnect between your financial self-image and your financial reality has been called “money dysmorphia.” If you’re in your 20s and you have an emergency fund, a retirement account, and no credit card debt, your personal finances are probably doing better than most people your age.
Bottom line
I am sympathetic to Gen Zers who worry that they will never make enough money to get ahead and who feel like the future is so bleakly uncertain that they can’t save and invest. But even if you’re young and feeling underpaid and over-burdened by debt, it’s important to have hope.
Every generation has its challenges. My parents’ generation had to worry about the Vietnam War and the 1970s economic stagnation. My grandparents’ generation had to survive the Great Depression and World War II. Throughout all these crises, most people just kept showing up, going to work, and trying to make things better.
While you’re young, keep investing in your career growth. Build relationships with great people. Try hard to make a difference. And have some fun! Your future is unwritten and can still be brighter than you imagine — no matter how much money you have in the bank.
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