7 Ways Gen Z Can Rebuild Their Savings Balances in 2024

According to recent research from USAA, the average savings account balance for someone between the ages of 18 and 26 dropped in 2023. While savings balances for this demographic climbed 28% from 2019 through early 2023, the last nine months of 2023 saw the average savings account balance decrease by 10%.

GOBankingRates contacted experts to explore solutions for how Gen Z can recover financially and increase their savings account balances this year.

“The biggest tip I give young folks is to start imperfectly and start small,” said Gloria Garcia Cisneros, a CFP and wealth manager. “If we focus on perfection, we often face paralyzation or become unmotivated.”

If you’re Gen Z, you likely haven’t hit your peak earning potential yet. Making your finances work while your income is low will help you build strong financial habits for the future.

Most financial experts will agree that the best way to save initially is to automate it, so you have one less thing to remember. It’s challenging to save money when you tell yourself that you’ll put what’s left over at the end of a pay cycle into your savings account.

“Gen Z can simply establish automatic transfers from their checking accounts into their savings accounts each payday,” said Erika Kullberg, an attorney, personal finance expert and founder of Erika.com. “This ‘pay yourself first’ model means they’re saving as much as they can, as early as they can, and always paying a bit more without having to think about it.”

By automating your savings, you don’t have to worry about taking any further actions, and you can go on with your life as normal.

Cisneros added, “Surprisingly, when you don’t see the money, it’s easier to build long-term success. You set it and forget it, and the automation takes care of the rest.”

Budgeting apps are an excellent way to track your spending and to figure out what’s happening with your money. If you don’t know why your savings balance is dropping, it will be difficult to figure out what needs improvement.

“Budgeting apps help you manage money and achieve savings goals through solutions such as YNAB (You Need a Budget) and Pocket Guard,” said Kullberg. “Once Gen Z has a solid idea of where their money is going, it’s easier to decide to save more and start allocating more funds to their money markets.”

“If you can find one small expense that you can eliminate, such as a streaming service or a meal out, that can add to your savings,” said Scott Lieberman, founder of Touchdown Money.

Review your subscriptions to find an expense you can cut out so that you have more money to save. It’s crucial that Gen Zers keep tabs on subscriptions they have for streaming services, gym memberships or any other fixed monthly subscriptions.

“Saving money can also be as simple as canceling those subscriptions that you no longer need, because cutting monthly subscriptions can free up money quickly,” added Kullberg.

Focus on finding services to cancel that you no longer use. As your lifestyle changes, you won’t need the same services.

Liberman suggested starting a savings challenge to motivate yourself to build some momentum. The goal is to increase the amount you save every week and to not touch the funds once they’re in the account.

Liberman explained, “If you start at $1 and increase your savings by a dollar a week, you’d save $1,378 in a year’s time.”

This is a solid financial buffer to have in place, and sometimes, a challenge is what you need to get motivated about your finances. You could also get your friends involved and make it social.

Starting a side hustle is one of the best ways for young people to increase their income and add to their savings. When your income isn’t high, you want to find ways to increase it so that you have more options.

Kullberg said, “Due to the gig economy boom, side hustles are now widely available for extra money making, including freelancing, tutoring and part-time jobs.”

The extra money earned could be transferred into a savings account to help build up a buffer or to invest in the future.

As essential as it is to build up your savings, you’ll also want to dedicate some funds today toward improving your financial situation tomorrow. When you invest in yourself, you can create opportunities in the future to increase your income, which will help you save more.

“You can take classes, join workshops or get certificates that improve your skills and help you earn more,” said Erik Severinghaus, the founder and CEO of Bloomfilter. “This kind of investment pays off in the long run, both financially and personally.”

While this option will initially lower your savings balance, the goal is to earn more in the future so that you can increase the amount you can set aside.

Severinghaus concluded, “Saving more money is not about huge sacrifices; it means making smart and careful choices, then staying with them.”

While young people in the Gen Z demographic are likely struggling with rising costs and expensive housing, it’s important to remember that there are still ways to save money so that you can plan for the future.