Although members of Generation Z (born 1997-2012) were hit with a global pandemic and an economic recession that had the potential to set them back financially, this generation remains resilient. According to a recent survey conducted by Goldman Sachs, a financial firm, Gen Z is more optimistic about their money going into 2023 than any other generation. Baby boomers (born 1946-1964), on the other hand, lack the optimistic spirit Gen Z is holding onto and were the least hopeful that their finances would improve during the new year.
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With baby boomers and Gen Z expressing very different attitudes toward their finances, let’s take a closer look at the survey results and hear from some financial experts on how these two generations are approaching their finances in 2023.
77% of Gen Z Believe Their Finances Will Improve in 2023
Despite the financial setbacks the young generation endured during COVID-19, Gen Z is very optimistic about their future, as 77% believe their finances will improve in the new year.
Boomers remain less optimistic, as a mere 28% believe they are in for financial growth in the new year.
Gen Z Aims To Expand Their Financial Literacy
This generation’s financial optimism might also come from the goal of expanding their financial knowledge in 2023.
“The financial goals of the Gen Zers that I interact with mostly revolve around increasing their knowledge about money in general since they didn’t learn it in school,” said Taylor Kovar, CFP and CEO at The Money Couple, a financial website that helps couples achieve financial freedom. “They realize that if they are ever going to achieve the lifestyle they want that they have to learn how to budget and invest and live within their means.”
Gen Z also has a different approach to financial literacy than previous generations and is more open to talking about finances among their peers.
“While finances used to be a taboo topic, and still is for many in the older generations, Gen Zers love to talk about how to maximize every dollar they earn,” Kovar said.
This financial openness is allowing members of Gen Z to obtain financial advice from each other rather than needing to seek out and spend money on professional advice. In addition to more open conversation among peers, the widespread access to professional financial advice geared toward Gen Z on social media platforms such as TikTok and Instagram is allowing for greater financial literacy among this generation. Access to more financial advice for free online is reducing the wealth gap as it relates to access to financial advice in a way other generations didn’t experience.
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Both Generations Are Prioritizing Saving in the New Year
Perhaps Gen Z’s financial confidence stems from planning to save more money. According to the survey, 58% of Gen Z plan to prioritize setting aside more money in savings this year. Although boomers are the generation least likely to prioritize growing their savings this year, 53% responded that they plan to expand their nest egg in 2023.
Baby Boomers Are Facing Retirement Challenges
As most baby boomers are either in retirement or approaching retirement, the stress and challenges that come with this life phase are weighing on this generation.
“Those who are already retired are facing the reality of living on a fixed income in an inflationary environment,” said Jay Zigmont, PhD, CFP and founder of Childfree Wealth. “Those who were debating retirement may be planning on another year or two of work after last year’s stock market decline. At the same time, many are looking at attractive early retirement offers as companies downsize.”
With boomers less optimistic about the financial landscape of 2023, it’s no wonder that many are opting to delay retirement.
“Boomers are pushing back their retirement timelines by a few years hoping for a recovery in the stock market,” Kovar said. “Many are investing in CDs and primarily other risk-free assets trying to hold on to what they have worked so hard to achieve all these years.”
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