Gen Z is one generation that continues to shock the masses, from their fashion sense – thrifting clothes – to their lingo, their instant technology adaptation and their spending habits.
Franchise principal and financial adviser at Consult by Momentum, Marnus Mostert, pointed out that millennials and Gen Z approach money way too differently.
Born between 1981 and 1996 during economic turbulence, millennials have cautious spending habits, where they are inclined towards saving money and long-term investing, such as house bonds and bank investments. Millennials strive for financial stability and security.
“While they were trying to get a foothold in adulthood, the world’s financial systems collapsed around them, taking with it the housing market. This instilled a sense of financial insecurity, as the safety nets millennials were told to expect in life – job security, trustworthy banks – evaporated. That’s why this generation tends to prioritise financial stability, often using budgeting apps, tracking expenses, and investing in retirement savings through vehicles like retirement annuities and tax-free savings accounts.
“Additionally, the rise of the gig economy has pushed many millennials to seek multiple income streams, fostering an entrepreneurial mindset and a careful approach to debt management,” said Mostert.
Meanwhile, Mostert indicated that Gen Z are impulsive buyers and seek instant gratification, and as they are fintech inclined, they easily manoeuvre banking apps and online currency.
Mostert added that Gen Z individuals focus their spending on short-term investment, such as buying gadgets, vacations and getting an education.
Although their acumen towards technology is admirable, Mostert emphasised that Gen Z needs to curb their spending habits by long-term investing and taking financial decisions to ensure financial stability.
“They are more inclined to spend on immediate needs and desires, reflecting their preference for short-term rewards. However, Gen Z needs to work on balancing their preference for instant gratification with long-term financial planning.
“While their embrace of technology and innovation in finance is commendable, it can sometimes lead to impulsive spending and inadequate preparation for future financial needs. Developing a stronger focus on long-term savings and investments and understanding the importance of financial buffers would help them build more robust financial security,” said Mostert.
For financial security, Mostert advised Gen Z to control their impulsive buying. Instead, they must strike a balance between long- and short-term investment, seek out a certified financial adviser and build an emergency fund.
The Star