For the generation that has witnessed the pandemic era of a collapsing economy and spent a huge portion of their ripening youth sitting at home exploring the digital realm for the maximum time, understanding the importance of financial planning at an early age is quite natural. For example, these savvy savers have popularised the concept of retiring by 30, so they choose the retirement planning strategy even before receiving their first paycheck. This may not come around as a general perception, but a huge community of financially responsible individuals exists.
Gen Zs can be quite an inspiration for millennials and even the previous generation, for that matter, because their approach towards managing finances is inspired more by the re-imagined concept of modern finance. They may not follow in the footsteps of their predecessors by selecting conventional methods for their financial goal planning. Still, they are doing something right that is delivering positive outcomes. In this article, we will break down certain facts and theories related to how this social media generation navigates the financial landscape.
Still, According to an American research organisation, almost 73% of Gen Zs are facing the brunt of currency due to soaring inflation rates, and they find it practically impossible to save wisely given the current economic climate. Its high time a Gen Z should put on the thinking hat, to act like a financial planner and ace the money management game with the following hacks:
- Trust the power of compounding: time is of the essence when it comes to compounding, for youths who have started making their money recently should learn to leverage a vast dimension of technological reforms in the fintech industry. Starting early is the key, and then exploring different investment options, seeking financial advisory assistance online, staying updated with the latest economic trends, expense control, and avoiding debt traps can be some effective measures to save big over a while.
- Think about the long road: when it comes to basic financial planning skills like seeking discounts and sale offers to save on shopping, utilising cashback and payback points effectively, etc. These digital natives have mastered the art of doing all these easily, so they feel equipped to handle overall finance. However, when it comes to planning for the long run, such as building emergency funds, formulating robust tax & liability planning strategies, and saving for early retirement, they still need to boost their financial knowledge in these areas for a more financially secure future.
- Don’t depend on a single source of income: who knows better than this digitally active generation the importance of having side hustles? Those who rely on a single job might find it overwhelming to save and invest a chunk of their income regularly for the ultimate financial freedom in later years.
For those still trying to figure out where to start, financial institutions like 1 Finance provide hyper-personalised financial recommendations to suit individual financial goals and objectives. They follow a re-imagined approach of fusing the elements of human psychology and nuances of modern finance through their patented assessment tool MoneySign®, which helps them understand how their behaviours and emotions impact their personal finance choices, and also gives them a fresh self-perspective.
