I sometimes forget that my kids are not Millennials, because you know…MILLENIALS are EVERYWHERE! I don’t mean any disrespect to you guys, but Gen Z’s day is coming fast and furious. What works for Millennials is not going to work for Gen Z just like what worked for the Boomers didn’t work for my Gen X crowd.
There is some disagreement about where the cutoff point is, but generally we see the cutoff as late 90s and that makes our sons some of the oldest Generation Z cohorts. When I think of how different my two sons are from the Millennials we know, it does seem that they have a quite different perspective about life, money, and the world.
According to some researchers, the Z crowd is very skeptical of the American Dream and apparently really stressed about how to pay for college and financial stress in general.
In my own children I see that they are more thoughtful about life decisions and they like to challenge the status quo. It seems that with such easily available information sources, they know there are different ways to think about things and there are often several right answers to the same question. That’s not a bad thing, right? I want them to be independent thinkers and find their own way. It generates some active discussions at home and although we don’t always agree with them, we respect their thinking proceses and how they reach their conclusions.
As parents, how can we acknowledge these differences and support them to use their strengths in making solid financial decisions? What can we learn from their way of thinking to apply to our own financial journey?
It may be just me, but I think in a lot of ways Gen Z’ers are already ahead of the curve. Here are some of our observations.
Practical ways that Gen Z already has a leg up:
- They save money by skipping what many Boomers, Gen X, and even Millennials think are essentials. For example, it is no sacrifice to skip TV/Cable service all together in lieu of other services (internet). Who needs TV? They may also be more comfortable buying smaller houses, or no houses at all. This sounds like a great way to keep your living expenses low and to avoid unnecessary debt.
- They consume in a different way. They buy less physical stuff and spend more on electronic consumption (digital books, videos, games, etc.) When purchasing physical items, they are more likely to do so through online shopping than going to the store or the mall. Shopping for entertainment just isn’t a thing (huge money saver if you ask me).
- They socialize through different mediums vs. in person clubs and hangouts. The desire to be in the same physical space as their peers is not as strong when they can connect remotely. This is absolutely normal for them. This leads to a more diverse set of inputs rather than just peers in their home town.
- They tend to be more risk-averse. They research options longer before making big decisions and seek out stability.
- They have a greater appetite for choice and control.
- They really appreciate facts and proof. Honesty and accuracy are important. You gotta back up what you are saying with solid references.
- They use information to make informed decisions but want the information readily available and in concise formats.
- They are more conservative about taking on debt and what the outcome/rewards for doing so will be (college debt in particular, challenging whether the payoff (ROI) is worth it?).
- They are realistic about expectations. This will sustain a healthy respect for market swings and keep unrealistic growth projections in check.
- They have less patience for waste which may naturally reduce consumption.
- They are more focused on efficiency which emphasizes optimizing effort and rewards.
- They are very protective of down-time, it’s not all about work after all. Work-life balance is extremely important.
- They could be more mobile for job prospects because they won’t be tied down to single employers or jobs with golden handcuffs (no pensions to wait for, employers more likely to adopt immediate vesting for 401ks for example).
- They are more entrepreneurial. With so many success stories about start-ups, they believe being your own boss may be attractive and attainable to just about anyone who wants it.
- They are more money conscious in general. They respect it’s purchasing power and what it takes to earn more of it.
I think these lessons are valuable to Americans in all generations.
Okay, at the core, I’m still their mom and want to see them succeed in life. I still worry that they will make good decisions. I worry more that they will follow a life that leads to happiness and not stress about money and debt. So, I am rather pleased about their independent spirit and want to celebrate it. It makes me hopeful about their futures. (Hey, maybe they actually listened a little during their first 18 years of life).
Ultimately, our Gen Z sons seem to already have the tools it will take to be good money managers. I will not be surprised if they could retire way before we will!
What observations have you made about your kids with respect to money, careers, and life ambitions? Do you see these differences as advantages or disadvantages from your own experience?