Gen Z wants to do forge their own financial path but some are already misrouted

Gen Z wants to do forge their own financial path but some are already misrouted
Reports highlight the desperate financial guidance needs of younger Americans.
NOV 12, 2024

Gen Z is on course to be the largest cohort of American homeowners and entrepreneurs, but many are risking this ambition by not getting the financial education they need.

Two reports highlight the paradox of ‘Zoomers’ with a desire to build solid financial foundations, but in many cases building up debt through poor management of credit card accounts.

And the generation’s lack of financial knowledge is a significant opportunity for advisors, something that Rachel Lawrence founder of Reverie Wealth and head of advice & planning at Monarch Money recently highlighted to InvestmentNews.

First, the good news. Gen Z focused Academy Bank polled 18-27-year-olds and found that growing savings (77%), building credit (51%), and increasing income (49%) are their top current financial goals. Further down the list are saving for a major purchase (39%), buying a house (36%), and paying off debt (33%).

The research found that most respondents are doing the right things to build their credit including paying bills on time and keeping their credit card balances low.

But this is not the case with all Gen Zs, as revealed in a separate survey of the generation from CreditCards.com which discovered that one in three respondents with credit cards currently carry debt, while 56% report missing or making late payments.

Ten percent of respondents have credit cards carrying debt of more than $5,000 and less than three in five have less than $100 in non-retirement account savings.

What unites both surveys is the need for financial education with credit and managing debt among the key topics required.

The Academy Bank poll found that almost three in ten of those that took part got their information about credit and credit building from social media, often relying on inaccurate information.

CreditCards.com found that nearly one of five of their survey respondents say they have little understanding of how their credit scores impact major purchases and 69% of Gen Zs believe financial literacy courses should be mandatory in both high school and college.

Latest News

Will Congress open the door to more private market opportunities?
Will Congress open the door to more private market opportunities?

A House bill could stop the SEC from blocking closed-end funds' private fund investments.

Northern Trust names new West Region president for wealth
Northern Trust names new West Region president for wealth

The new regional leader brings nearly 25 years of experience as the firm seeks to tap a complex and evolving market.

Capital Group extends retirement plan services further with a focus on advisors
Capital Group extends retirement plan services further with a focus on advisors

The latest updates to its recordkeeping platform, including a solution originally developed for one large 20,000-advisor client, take aim at the small to medium-sized business space.

Why RIAs are the next growth frontier for annuities
Why RIAs are the next growth frontier for annuities

David Lau, founder and CEO of DPL Financial Partners, explains how the RIA boom and product innovation has fueled a slow-burn growth story in annuities.

Supreme Court slaps down challenge to IRS summons for Coinbase user data
Supreme Court slaps down challenge to IRS summons for Coinbase user data

Crypto investor argues the federal agency's probe, upheld by a federal appeals court, would "strip millions of Americans of meaningful privacy protections."

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.