5 Money Habits Gen Z Thinks Are Normal — but Are Keeping Them Broke
Written by
Sean Bryant
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Is your bank account struggling to keep up despite how much and often you get paid? Poor money habits may be to blame. You’re not alone, many Gen Zers struggle with bad habits, from not budgeting to failing to save, that keep them broke.
If you have any of these bad money habits, we have some tips to help you break them and get your savings back on track.
Failing To Plan
Rent is expensive. It’s crucial to make sure you have enough money to make your rent payment each month and cover other necessary living expenses. Many Gen Zers run into issues managing expenses because they fail to plan.
Although budgeting may seem outdated, it’s useful for tracking your income and spending to ensure you can pay your bills and save for all the fun things you want to do.
Using Venmo Like a Bank Account
Splitting dinner and need to repay your friend? Venmo is your go-to for reimbursements, but don’t use it in place of a bank account. The app doesn’t pay interest for holding your money, so the longer you keep funds there, the more money you lose.
Instead, repay your friends with funds connected to your bank account and keep your money in an account that pays interest or dividends, like a high-yield savings or brokerage account.
Relying on Social Media for Advice
The internet is a wealth of information, but not all is accurate. Creators on social media apps want to get views and go viral, so they sometimes say false or unverified things to garner attention. Relying on bad advice from apps like TikTok can cost you your hard-earned money.
Instead, do your own research on a reputable site or consult a professional, like a tax accountant or financial planner, before making any significant money moves.
Putting off Retirement Savings
Just because you’re young doesn’t mean it’s “too early” to start saving for retirement. There’s no such thing as starting too early. With the time value of money, the longer your money has to grow in a retirement savings account, the more you’ll have when you’re ready to retire.
The longer you wait to save, the more you’ll have to make up in the future. If your company offers a 401(k) or similar retirement account, consider putting at least a small percentage in each month to get started. If your company doesn’t offer a retirement account option, consider contributing to an IRA so you don’t fall behind.
Taking Too Many Risks
When you’re early in your career, taking too many risks with your money is a bad habit. Investing in risky assets can cost you more than you can afford to lose. While assets like cryptocurrencies can make you a lot of money, they also come with significant risk. And if you do make money, you need to consider the tax implications, as taxes can start to add up if you don’t pay attention.
More From GOBankingRates
