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financial coaching money management personal finance Nov 11, 2022

Key Takeaways:

  • Only 57% of young adults aged 18-24 are considered financially literate, according to a Global Financial Literacy Excellence Center survey.
  • Financial literacy is the ability to understand and use financial concepts such as budgeting, saving, investing, and credit.
  • According to a Financial Industry Regulatory Authority (FINRA) survey, only 24% of Gen Z respondents could correctly answer four out of five financial literacy questions.
  • The consequences of financial illiteracy include debt, lack of financial stability, and difficulty advancing in one's career.
  • Gen Z has a unique view of money thanks to their status as digital natives. They see money as a way to connect with others and share experiences rather than simply earn and spend it.
  • It's still unclear whether or not Generation Z is interested in investing, but they are tech-savvy and comfortable using the internet for research purposes.
  • A recent study found that almost half of Gen Z is in debt, including those with student loans or credit card debt.


A Global Financial Literacy Excellence Center survey found that only 57% of young adults aged 18-24 are considered financially literate. This is a problem because financial literacy is essential for making sound financial decisions, yet many young people lack the basic knowledge they need.

Financial literacy is the ability to understand and use financial concepts. This includes topics like budgeting, saving, investing, and credit. According to a Financial Industry Regulatory Authority (FINRA) survey, only 24% of Gen Z respondents could correctly answer four out of five financial literacy questions. This lack of financial knowledge can have severe consequences down the road, which is why it's so essential for young people to learn about personal finance as early as possible.

Who is Gen Z?

Gen Z is the demographic cohort after the Millennial generation. There are no precise dates when Gen Z starts or ends; demographers and researchers typically use the mid-1990s to mid-2000s as starting birth years. This puts the age range for Gen Zers at about 18-24 years old in 2020.

What sets Gen Z apart from other generations is that they are the first true digital natives. They grew up with technology and the internet, which has shaped their behaviors and views in several ways. For example, Gen Zers are more likely to be independent, entrepreneurial, and open-minded than older generations.

The Consequences of Financial Illiteracy

One of the most significant consequences of financial illiteracy is debt. Managing debt is imperative. Without a firm understanding of how money works, it's easy to get in over your head with credit card debt, student loans, and other types of debt. If not, this can lead to years of financial struggles and even bankruptcy. Gen Z needs to be taught about credit scores, interest rates, and responsible spending to avoid falling into the same traps that so many of their elders have. Proper debt management is essential from the beginning.

Another consequence of financial illiteracy is a general lack of financial stability. Those who are financially literate are more likely to make sound financial decisions that result in long-term stability. This includes investing in a retirement account or buying property instead of renting. On the other hand, financially illiterate people are more likely to make poor choices that can lead to a cycle of debt and insecurity. It's never too early to start saving for retirement, and financial literacy can give Gen Z the tools they need to make savvy decisions about their money.

Finally, financial illiteracy can hurt one's career. Those who understand personal finance are more likely to be able to negotiate their salary and benefits package effectively. They're also less likely to make costly mistakes that could jeopardize their job security. Some jobs also evaluate your application by using information from your credit reports. By contrast, financially illiterate people may find it harder to get ahead in their careers due to their lack of knowledge about money management. 

How does Gen Z view money?

Gen Z has a unique view of money, as they are the first generation to grow up with widespread access to the internet and all its benefits. For Gen Z, money is not just about earning and spending; it's also about connecting with others and sharing experiences. Z sees money as a way to make life more enjoyable. They are more likely than any other generation to use their money to buy experiences rather than things. This may be because Gen Z grew up during the Great Recession, which taught them that material possessions could be taken away at any time. As a result, Gen Z is much more interested in cultivating meaningful relationships and experiences than in accumulating stuff.

Gen Z is socially connected, thanks to platforms like Facebook, TikTok, and Instagram. They use social media to share their thoughts on money and connect with others with similar views. This helps Gen Z feel like they're part of a community regarding financial matters, making them more likely to take financial advice from their peers than from older generations.

Does Gen Z care about investing?

While it's still unclear whether or not Generation Z is interested in investing, we know a few things. For one, Gen Z is very tech-savvy and comfortable using the internet to research investment options. They're also comfortable with risk, as shown by their willingness to invest in things like bitcoin and other cryptocurrencies. However, it's important to note that Gen Z is still young and may not be ready to invest in traditional stocks and bonds. They may be more interested in investing in alternative options like real estate or peer-to-peer lending. It's up to financial educators to help Generation Z understand the risks and rewards of different investment options so they can make informed decisions about their money.

As the older generations can attest, getting started with wealth management and the stock market early can make it much easier down the road.

How much of Gen Z is in debt?

A recent study found that almost half of Gen Z is in debt. This includes both student loan debt and credit card debt. And while a lot of this debt is manageable, a few Gen Zers are struggling to keep up with their payments.

This is a severe issue, as debt can harm one's life in many ways. It can make it challenging to buy a house or car or even to get a job. It can also lead to stress and anxiety, leading to health problems.

The good news is that financial knowledge can help Generation Zers manage their debt and stay out of trouble. Financial educators need to better teach Gen Z about the dangers of debt and how to avoid it. They must also teach them how to create a budget and use credit responsibly.

With the proper education, Generation Z has the potential to be one of the most financially literate generations ever. They need someone to show them the way.

How Can We Improve Financial Literacy Among Young Adults?

Improving financial literacy among young adults starts with education. Many schools do not offer personal finance courses, which leaves young people woefully unprepared when they enter the real world. Fortunately, in recent years, high schools have added personal finance curricula in many states. There are several ways to fill this gap, including online courses, podcasts, books, and even games. In addition to formal education, parents and guardians can teach younger generations about money matters.

Of course, knowledge is only part of the equation. Young adults also need to be taught how to put their financial literacy into practice. This means learning about budgeting, goal setting, and investing. Once again, several resources are available to help with this, including online calculators and budgeting tools. The most important thing is that Gen Z has access to the resources they need to make informed decisions about their finances.

How can I increase my engagement with Gen Z?

If you want to increase your engagement with Gen Z, you can do a few things. First, make sure that your content is accessible and relatable. This means using language that Gen Zers will understand and avoiding financial jargon. Second, use social media to reach out to Gen Zers where they're already spending their time. And finally, consider partnering with influencers or organizations that Gen Zers trust. By taking these steps, you can ensure that your message is heard loud and clear by Gen Zers.

Gen Z is the future, and they will be a force to reckon with regarding finances. It's up to us to make sure they're prepared for the challenges ahead. With the proper education and support, Gen Z can become a generation of financially literate adults. And that's good news for all of us.

Creating a Gen Z Financial Literacy Program

Generation Z covers a broad range of demographic gaps - from those just starting to attend college to those just over 10. Individuals at any age need different levels of advice, but establishing an early and preferably early high school relationship can improve the ability to make savvy decisions for Gen Z. Generation Z's young people need financial literacy to manage their finances effectively.


Financial literacy is essential for young adults yet far too many lack even the most basic knowledge in this area. Education is key to improving financial literacy among Gen Z, but it's also crucial that they have access to practical resources to help them put their knowledge into action. With proper education and support, Gen Z can avoid the pitfalls of debt and learn how to build a bright future for themselves financially speaking.

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