Where Does Gen Z Go for Financial Info?
Born between 1997 and 2012, Generation Z is the first generation not to know life without the internet. These digital natives grew up with technology at their fingertips and at a young age witnessed the birth of the smartphone, e-reader and Bluetooth. They turn to their favorite apps—from YouTube to Reddit—more than they turn on the TV.
As a group, Gen Zers are also familiar with economic crises: the Great Recession of 2007-09 and, more recently, the COVID-19-induced recession. In a March 2020 Pew Research Center survey, nearly half of young adults at the time (then ages 18 to 29, which would’ve included the oldest Gen Zers and youngest millennials) reported that they or a member of their household had lost a job or taken a pay cut because of the coronavirus outbreak. This was the highest share of any age cohort.
Fast-forward to today, and many Gen Zers are stressed about not having enough money or making wrong choices with their money. They’re also less certain about the lifetime financial benefits of college relative to the costs.
So where do Gen Zers, who find themselves at the crossroads of technology and uncertain economic times, go for financial information?
“There’s an App for That”
Having grown up with the internet, Gen Z has access to financial resources and platforms that weren’t available to earlier generations.
A case in point, my 20-year-old has a daily budget widget on her smartphone. She can glance at it anytime to know exactly how much more she can spend that day. The app calculates a daily spending limit based on the income from her part-time job, her recurring expenses and saving goals.
Her financial goals since senior year of high school include: no student loans past freshman year of college, a cash reserve for busy school periods when she reduces her work hours, and the ability to pay her credit card bill in full each month. She stays on track by using a banking app to schedule automatic transfers of 30% of her monthly pay to a linked savings account.
As a Gen Xer, my early financial plan consisted of three envelopes: one for saving, another for spending and a third for donating. Yes, Gen Zers are more tech-savvy.
Young Adults Turn to Social Media for Financial Guidance
With smartphones come apps and access to wide-ranging financial advice on social media. Such access can be a big advantage for Gen Zers interested in learning about budgeting, paying down debt and investing, among other topics.
What types of advice are young adults seeing most on social media? A Forbes Advisor survey of more than 1,000 millennials and Gen Zers in January 2023 pointed to these top five topics: investing in stocks and bonds (57%), personal budgeting (51%), passive income (49%), reducing debt (40%) and building or improving credit (37%).
In the same survey, 79% of respondents said they have gotten their financial advice from social media. Outside of social media, top sources were family (35%) and internet searches (33%).
Gen Zers Emerge as Young Investors
For many generations older than Gen Z, an introduction to investing might have been with a first job and a company retirement plan.
According to research from the FINRA Investor Education Foundation and the CFA Institute, a higher share of Gen Zers started investing before they were 18 years old than among the two previous generations. The May 2023 report found that 56% of those ages 18 to 25 in the U.S. had at least some investments.
The research’s findings pointed to the ease of accessing financial information on social media and the growth of investing apps and cryptocurrencies as low barriers.
“The Gen Z population is diverse and digitally savvy,” said FINRA Foundation President Gerri Walsh upon the report’s release. “They are using mobile technology to enter the financial markets in unprecedented numbers and consulting a wide range of information sources as they do so.”
Common-Sense Practices for New Entrants
Whether looking to build good financial habits or dipping into investing, Gen Zers—and people of any age—might keep in mind some basic guideposts when searching for financial tips. Here’s what I’m telling my own Gen Zer:
- Don’t trust what you don’t understand. Research and verify any advice before considering it.
- Do your homework on the people giving advice. Look beyond follower counts to check experience and credentials. Financial influencers, or “finfluencers,” may have few qualifications and may not always disclose conflicts of interest.
- Be aware of solicitations and scams on social media. A recent Federal Trade Commission report noted that 1 in 4 people who said they lost money to fraud since 2021 pinpointed the start to social media. And in the first half of 2023, 53% of the total money reported lost to social media fraud was from investment-related scams, the report noted. Unlike licensed financial advisors, finfluencers are not covered under consumer protection laws, leaving little recourse to recover losses.
Free Personal Finance Resources from the St. Louis Fed
Have a Gen Zer in your life who could benefit from trusted, go-to personal finance resources?
The St. Louis Fed’s Economic Education program offers a wide range of public resources for teachers, students and consumers interested in personal finance topics.
Here’s a selection from the St. Louis Fed to check out and download. You can also subscribe to the Econ Ed team’s newsletters and alerts to learn about newly added resources.
Econ Ed Program Resources
Budgeting
Building or Improving Credit
Reducing Debt
- Balancing debt, income, and saving for the future
- Using credit cards responsibly
- Paying off credit card debt
Investing
This blog explains everyday economics, consumer topics and the Fed. It also spotlights the people and programs that make the St. Louis Fed central to America’s economy. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.
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