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By Barbara O’Neill, Ph.D., CFP®

There are currently six adult generations in the United States: The GI Generation (born 1901-1926), Silents (1927-1945), Baby Boomers (1946-1964), Generation X (1965-1980), Generation Y; a.k.a, Millennials (1981-1996) and Generation Z (1997- 2015).

Generation (Gen) Z, age 7 to 25 in 2022, includes young adults in high school, college, the workforce, and military service. OneOp recently held a webinar about Gen Z. This post summarizes characteristics about members of this cohort and tips for financial education and counseling.

Gen Z Characteristics

  • Diversity – Gen Z is the most racially and ethnically diverse cohort than the three previous generations. According to Pew Research Center, just over half (52%) of Gen Z was White in 2019 vs. 82% of Baby Boomers in 1969. Of the remainder of Gen Z, 25% were Hispanic, 14% Black, 6% Asian, and 5% other.
  • Historic Touchstones – Gen Z typically has no memory of 9/11 and no memory of a time that the U.S. was not at war. Three-quarters report mass/school shootings as a significant source of stress. Many grew up during the Great Recession and its aftermath and were shaped by their parents’ economic pressures.
  • Digital Natives – Gen Z has never known a world without computers or cell phones and has always had an abundance of information at its fingertips. Almost half spend 3+ hours a day online, excluding school or work requirements, and, on average, spend 4 hours a day on social media platforms including Snapchat, Instagram, YouTube, TikTok, Twitter, and Facebook.
  • Loneliness – Gen Z has been called the “loneliest generation.” Extensive time online, especially social media use, is positively correlated with feelings of anxiety, depression, and loneliness. Many also experience FOMO (fear of missing out) when comparing their life with posts made by others showing their best side.
  • Military Service – More than half (51.6%) of active-duty enlisted personnel and 14.4% of active-duty officers are 25 years old or younger. The service branches with the highest percentage of active-duty enlisted members are the Marines (72.7%), the Army (50.9%), and the Navy (46.9%).
  • Financial Well-Being – Gen Z has the lowest level of financial literacy, compared to older generations, and the most difficulty making ends meet on a monthly basis. On the positive side, they are the most likely generation to have participated in, or been offered, a financial education class or program. Their two primary sources of personal finance information are social media outlets and parents or family.

Working With Gen Z Clients

  • Don’t Make Assumptions – Remember that Gen Z clients are the expert on their financial situation. Like all clients, each one will have a different level of understanding and different needs and goals.
  • Start With the Basics – Include four key topics, depending on a client’s need: tracking income and expenses, creating a spending plan (budget), creating a savings plan, and managing credit and debt.
  • Examine Cash Flow – Help Gen Z clients track income/expenses for a month to understand their finances. This can be done using paper and pencil worksheets, computer spreadsheets, or any number of apps.
  • Create a Budget – Use clients’ preferred planning tool, which will probably be a budgeting app. Help clients understand that a budget isn’t controlling them. Rather, it is providing them with control over their money.
  • Discuss Credit and Debt – Teach Gen Z clients that credit is the use of future money for present spending. Also, how to request and decipher a credit report and score and the high cost of making minimum payments on credit card bills. For military clients, also stress the effects of finances on security clearances.

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