7 Things Boomers Get Wrong About Gen Z and Their Finances
Written by
Nicole Spector
Edited by
Molly Sullivan
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Every generation gets a bit of a kick from hating on one another. Millennials bash Gen Z; Gen Z bad mouths millennials. Boomers get a fair amount of sass thrown their way, too. But don’t feel too sorry for them. They’re no angels either and some can be found hurling insults (sometimes about their money habits), even if only in their minds or to one another, at Gen Z, the generation born between 1997 and 2012.
There’s usually no real malevolence involved in these insults. But they’re still sort of toxic to hold onto. What exactly do boomers get wrong about Gen Z, particularly when it comes to their finances?
Assuming Gen Z Is After the Same Kind of Life They Were After
In the opinion of Jay Zigmont, PhD, MBA, CFP, Childfree Wealth, the biggest thing that boomers get wrong about Gen Z is the assumption that they live by the same life plan boomers did when they were their age.
“Gen Z is growing up in a completely different world than boomers and have different plans for their life,” Zigmont said. “For example, I work with people who are childfree, meaning they will never have kids. A recent Pew study found that 47% of adults under 50 do not plan on having kids if they do not already have them. Life, financial, tax and estate planning for childfree people is completely different from boomers who were trying to achieve the American Dream of 2.5 kids, a house and a white picket fence.”
Not Getting the Memo That Pension Plans Are Mostly Over
In the prime working years of boomers, workplaces offering pension plans was not uncommon. It was actually a key sign of a “good” and “stable” job. That’s no longer the case. Most companies providing retirement benefits offer 401(k) plans instead of pension plans, which are pricier.
“Boomers often stress how important it is to find jobs with defined benefit pensions, but Gen Z knows that these plans are getting harder to find, especially in the private sector,” said Chad Harmer, founder, CIO and financial planner at Harmer Wealth Management. “Instead, they focus on putting as much money as possible into employer-sponsored plans like 401(k)s and RRSPs, and a lot of them are looking for business opportunities that fit with their values. This shows how flexible and strong Gen Z is when it comes to making retirement plans that work with the way things are now.”
Shaming Gen Z for Renting Instead of Buying a Home
The housing market was a totally different beast 40, 30, even 20 years ago. Today, it’s a lot harder to be able to afford a home. Boomers may not understand this and get on Gen Z’s case about squandering money on rent instead of investing in a home. To do this is to ignore the challenges (including the burden of student loan debt) that Gen Z is up against.
“Boomers might see this as a lack of desire, but Gen Z sees it as a practical response to the way the market is right now,” Harmer said.
Believing Gen Z Is Lazy and Wants To Be Taken Care Of
“Another false belief is that Gen Z is lazy and wants to be financially taken care of,” Harmer said. “This image doesn’t take into account how creative and driven to succeed this generation is, as many use technology, social media and the gig economy to make extra money in different ways.”
Gen Zers are generally highly driven and eager to reach financial freedom. They’re just not up for burning out to get there.
“Gen Z puts mental health, work-life balance and financial independence at the top of their list of priorities. This shows that they are proactive rather than passive in managing their lives and jobs.”
Assuming They’re Not Planning for Retirement
Perhaps it’s because Gen X, in general, wasn’t more aggressive about planning for retirement and are now in a precarious place, that many boomers assume Gen Z is in the same rocky boat. They don’t see that Gen Z is actually really on top of retirement savings and goals.
“People think that Gen Z doesn’t save enough for retirement, but they really do,” Harmer said. “They often start contributing to their retirement earlier than previous groups. This group knows more about the power of compounding and how important it is to start saving early because they can learn about money online. Real problems, not a lack of discipline, are things like school loans and rising living costs that make it hard to prioritize money.”
Closing Their Minds Against Fintech
Gen Z is made up of digital natives who are leveraging technology to organize their finances, manage wealth and even make money. Boomers tend to frown upon this.
“Boomers may think that Gen Z’s reliance on fintech apps is dangerous, but this dependence is actually a sign of how smart they are with money,” Harmer said. “Gen Z uses planning apps, robo-advisors and crypto platforms to make managing their money easier and better. This often makes them more involved with their money than people from previous generations.”
They Buy Into the Avocado Toast Myth
We’ve all heard about how young people are so obsessed with frivolous indulgences — like avocado toast — that they’re squandering money on these things. Money they could be saving or investing. Boomers can get pretty judgy about this and when they do, they’re not seeing the full picture.
“It’s not a good way to look at Gen Z’s spending habits to say that they spend too much on things like avocado toast and streaming services that aren’t necessary,” Harmer said. “They care about their cash goals as well as having fun and being easy to get to. Gen Z knows how to balance spending money on things they don’t have to with saving and investing. They show that you can enjoy life now while planning for the future.”
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