A new study by software giant Intuit reveals that Gen Z, the generation most associated with terms like great resignation, quiet quitting and “resenteeism,” is extending its soft-life approach toward money to a “soft-savings” outlook on retirement. However, while Gen Z might be eager to take a different life path than previous generations, young adults prioritizing immediate personal well-being over saving for retirement might be setting themselves up for a potentially unhealthy financial future.
Nearly three-quarters of Gen Zers would prefer a better quality of life to extra money in the bank, and 66% claim they are only interested in finances as a means to support their current interests.
“The economic shocks of the last few years have transformed how Gen Z views success, and this survey revealed that prosperity means something different to everyone, particularly Zoomers,” said Brittney Castro, Intuit consumer financial advocate.
Having experienced first-hand the social and economic effects of the COVID-19 pandemic, it could also be that this youngest working generation simply doesn’t see the financial trappings of other generations as being attainable. And given the prevalent use and influence of social media in their lives, it’s not surprising that many Gen Zers have a pessimistic outlook regarding their financial futures when they compare their lives to the unreachable “realities” they see online.
According to Intuit’s report, social comparison is making zoomers feel more inadequate and less financially comfortable than their older peers. Twice the amount of Gen Zers polled (32%) admit to comparing themselves to others on social media as opposed to the general population (14%). Seventy-three percent claim that social media’s depiction of prosperity makes then feel like they’re falling behind in their life goals.
Two-thirds of Gen Z individuals surveyed (66%) stated that they’re not sure they’ll ever have enough money to retire, and 67% of those polled feel they will never have the things in life that they want due to their financial position. The current economic climate is deterring more Gen Zers (73%) than those of the general population (63%) from making long-term financial goals, and the same number feel they are behind in their life goals compared to 55% of the general population.
The survey noted that despite being digital natives with access to vast amounts of financial information and being largely adaptable to new apps and fintech tools, Gen Zers’ knowledge hasn’t translated to behavior. Understanding the big picture and becoming financially literate is necessary, regardless of how “soft” zoomers want to approach life in the here and now.
Two thirds (66%) of respondents claim to know how to keep track of their income and create a budget but haven’t done it. Additionally, 64% understand the importance of investing but don’t know how to do it, while 63% claim to have financial knowledge but are not sure how to use it.
Looking on the bright side, Gen Zers have the most time ahead of themselves to learn how to properly manage their money and gain crucial financial acumen before they retire. As Dennis Shirshikov, strategist at Awning Company in NYC, told Fortune, putting off saving for retirement is the biggest mistake a Gen Zer can make, but now is the perfect time to start.
“The typical Gen-Zers may be making a resolution to start saving for retirement or to increase their contributions to their existing retirement accounts,” says Shirshikov. “This is a great time to review your financial goals and assess your progress towards meeting them. If saving for retirement is a priority, now is the time to take action and start making a plan to achieve your goals.”
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