How Gen Z sees and builds wealth (2024)

Generation Z grew up in the aftermath of the Great Recession and saw their parents and siblings struggle financially. They've seen interest rates rise,¹house prices rose,²and our economy faced uncertainty. Despite these challenges, Gen Zers are carving their own path.

Our survey data shows that more than 50% of Gen Zers have a combination of debt and savings, or debt without savings. However, they actively manage their financespay their billson time and covering significant expenses such asgroceriesand supplies.

Within this group, about 30% of Gen Zers surveyed can pay their bills but currently have no savings. They need to explore new savings strategies to build a financial cushion for their future.

On the positive side, about 10% of respondents are debt-free and have additional savings. They demonstrate the potential for financial independence.

What is the average income of Generation Z?

Gen Zers are starting their professional journey or pursuing further education. They earn an average income of $32,500 per year.³While this may seem low compared to more established generations, their income levels should increase as Gen Z progresses in their careers.

But it's not just about the revenue they bring in. It's about how they deal with it. Gen Zers have shown that they are progressive when it comes to managing money. They arebudgeting, saving and planning their financial future. These habits, combined with increasing income over time, provide a strong foundation for growing prosperity.

Gen Z's approach to making money goes beyond traditional jobs. Many explore side hustle and become entrepreneurs.⁴This has allowed them to establish multiple cash flows and gain valuable experience in money management and business, leaving them better positioned to grow their wealth over time.

How Gen Z manages their money

Gen Z, who are in the early stages of their financial journey, tend to have lower net worth than other generations.⁵But their proactive money management habits and focus on building wealth indicate their willingness to improve their financial status over time.

Generation Z's approach to money management reflects a combination of caution and foresight. Here's an overview of how Gen Z manages their money, according to our survey results:

Gen Z's financial habits demonstrate their thoughtful approach to managing their money, with an emphasis on maintaining checking and savings accounts to support their financesfinancial goals.

Generation Z's approach to money management reflects a cautious attitude towards credit.About 21% of Gen Zers don't have a credit card, possibly due to a preference for cash transactions or concerns about credit card debt.

On the other hand, about 25% of Gen Zers have three or more credit cards, indicating they may be comfortable with credit and use it strategically. They can use credit cards for thisstart building creditand work on future goals such as buying a house.

A significant portion of Gen Zers are actively monitoring theirscreditworthiness. Many fall within fair to good credit, with 19% having a score between 580-669 and 22% between 670-739. These are similaraverage scores by ageand is promising, especially for those who are still building their credit history.

19% of Gen Zers are unaware of their situationcreditworthiness, which underlines the need for more financial education. Understanding how to build credit can help secure loans, rent apartments and improve job prospects, as many employers run credit checks during the job application process.

Access to Generation Zcredit cardand credit scores appear to demonstrate a cautious but strategic financial mindset. Based on the responses we collected, Gen-Z is shaping their financial future by trying to manage credit responsibly and paying attention to their credit scores.

When it comes to credit card preferences, Gen Zers show the greatest interest in cards that offer real benefits and minimize costs. Gen Zers are attracted to two main features and one type of credit card: cash back cards, no annual fee cards and student credit cards. This reveals a practical approach to credit card use with an emphasis on maximizing returns from daily transactions and minimizing the costs ofmaintenance costs.

Debt is a reality for many Gen Zers, but the magnitude varies. Based on the results of our survey, 41% of Gen Zers have less than $2,000 in total debt, or no debt at all. Another 40% have debts ranging from $5,000 to $25,000. Additionally, we found that 8% of Gen Zers have between $25,000 and $50,000 in debt, while 5% have more than $50,000 in debt. 6% of Gen Zers were unsure of the exact amount of debt they had.

Of the 41% with debt of $2,000 or less, 20% are completely debt-free. This suggests that a significant portion of Generation Z has managed to have a bright financial future.

Despite different types of debt,⁷it seems that some Gen Zers are doing their best to keep their debt levels in check.

Building wealth isn't just a concept for Gen Z. It's a priority. Our research shows that 62% of Generation Z consider building wealth very important, while only 3% consider it not important at all. Financial security and planning are clearly priorities for this generation.

Gen Z's approach to building wealth includes saving, investing and diversifying the way they make money. Nearly half (47%) of Gen Zers keep a budget and closely monitor their spending, while 34% rely on memory to keep track of their finances.

Surprisingly, 17% of Gen Zers have oneFinancial Advisorhelp manage their money. Generation Z's proactive approach to building wealth is a big step toward financial freedom.

How much wealth does Generation Z have?

Despite their age, our research shows that a large part of Generation Z has already started doing thisincrease their savings:

• About 1 in 5 Gen Zers have no savings, but an encouraging 42% have already managed to save at least $1,000. They are actively building their savings.
• 4% of Gen Zers have amassed more than $50,000 in savings, showing impressive financial progress at a young age. Additionally, 1 in 4 Gen Zers have saved more than $10,000.

• When it comes to savings, 46% of Gen-Z respondents save $100 or less per month. Among Gen Zers, 28% save between $1 and $100 per month, 18% don't save at all, and 19% save up to $250. At the other end of the scale, 35% save more than $250 per month, while 7% save more than $1,000.

There is a wide variation among Gen Zers. Some are still in the early stages of their financial journey, while others have already made significant progress toward accumulating wealth. The diversity of financial situations within Generation Z reflects the different sources of income, financial strategies and personal relationships among people in this generation.

Gen Z investment

Let's see how Generation Z is doing itinvestmentbased on our survey results:

• A significant 37% of Gen Zers have no investments, including traditional stocks, commodities, index funds, government bonds, CDs, real estate or cryptocurrency.
• Only 22% of Gen Zers invest in traditional stocks, but this is the most common investment option among them.
• Interestingly, 38% of Gen Zers don't use standard investment platforms like Fidelity, Robinhood, Vanguard, or TD Ameritrade. 22% use cryptocurrency exchanges such as Coinbase, Kraken or Binance.
• For those Gen Zers who do invest, they prioritize factors such as potential return on investment (49%), level of risk (50%), fees and costs (51%), and reputation (48%) as very important . However, factors such as the available liquidity (43%), the environmental impact of the investment (39%) and the available options (41%) are considered less important.

Learn by example

Everyone has made financial mistakes in their lives, and Generation Z is no exception. However, this generation seems to have grown from mistakes they and others have made.

Here are some key takeaways from our research into Generation Z's financial experiences:

Top financial mistakes made by Gen Z

The Biggest Obstacles You'll Face in Building Wealth

• Low-paid jobs (46%)
• Unexpected expenses or emergencies (38%)
• Difficulty finding a job (34%)

Resources for wealth building advice for Generation Z

Overdone takeaways

• Generation Z actively wants financial tools to fix their financial mistakes and build credit.
• Generation Z wants to budget, save for emergencies, and make informed investment decisions.
• It is important for Generation Z to diversify the sources of financial advice, including social media, literature from financial experts and real-world examples.

These insights show that Gen Zers are committed to relearningfinancial insightand money management and seeking out reliable tools for guidance.Salary vs Side Gigs

When it comes to building wealth, our research shows that Generation Z is tackling the challenge with several strategies:

• Side appearance (46%):Generation Z recognizes the value of additional income streams, whether through passion projects, leveraging skills or exploring entrepreneurship.Side hustleprovide financial flexibility and the ability to increase income despite the challenge of balancing work and personal time.
• Earn a salary or start a business (40%):Generation Z understands the importance of securing onestable salaryor venture into entrepreneurship to build a strong financial foundation. This approach enables them to cover expenses, invest in their future and work towards financial security.
• Savings (65%):Despite facing limitations, many Gen Zers prioritize saving. They understand that even small steps help create a financial safety net, support future goals, and prepare for unexpected expenses.

The high cost of living remains a major problem.⁸Part-time jobs, reliable pay slips and conscious savings can form a solid foundation for the financial future of this generation.

When it comes to financial goals, Generation Z has some clear priorities and motivations. Here's what they thought was important when asked:

• Financial independence or early retirement (27%):Gen Z defines financial success as achieving financial independence or the ability to retire early. They prioritize long-term financial security and freedom over pursuing the highest income.
• Advice for important matters (25%):Generation Z strives to have the financial resources to afford things that are important to them. They value the ability to make meaningful purchases and prioritize experiences or things that bring them joy and satisfaction.

Top 3 financial goals

Moreover, 20% of respondents also say thissaving for retirementare among their top three financial goals, highlighting their progressive approach to long-term financial planning.

Motivation to save money

While saving for the future, Gen Z is also finding ways to fit smaller expenses, like travel, into their budgets without compromising their broader financial goals.⁹

Despite their proactive approach to managing their finances, Generation Z is not without financial worries. Our research shows that 47% of respondents are only somewhat confident in their financial future, while 32% express a high degree of confidence.

This data suggests that Generation Z generally has a positive view of their financial future, but is wary of potential obstacles. Staying optimistic and planning for the future must remain their focus to overcome this fear.

Interestingly enough, Generation Z's concerns are not just about their current financial situation. It's also about their financial skills. Our research shows that Gen Zers seek financial knowledge online. It shows that 38% turn to social media for financial advice and 35% consult literature from financial experts to help them make decisions. These topics may be relatedbest investments during inflationor even basic information such astypes of bank accountsthat are available.

Instead of letting this fear take over, Generation Z is motivated to learn about financial management and make informed financial decisions. This speaks to Gen Z's adaptability and determination to achieve financial success.

Our survey results show that Generation Z is a financially conscious generation. They know the importance of building wealth and are actively working toward their financial goals. Despite challenges such as low wages, debt and a changing economy, Generation Z remains focused on their goals and achieving financial freedom.

Money is a means to an end for Gen Z: it brings financial independence and helps them achieve their goals. Their dedication to managing their finances comes from the understanding that true wealth is not tied to a paycheck.

Want to build a financial future for your family? Be inspired by these icons who builtgenerational wealth.

How much wealth does Generation Z have?

Despite their relative youth, Generation Z is already making significant progress in wealth accumulation. While 20% of Gen Zers have yet to start saving, 42% have managed to save at least $1,000. Although this is a small amount, we all know that starting small is the first step to building wealth.

Surprisingly, 4% of Gen Z respondents have already saved more than $50,000. While not staggering, it is an impressive number and those who have it should be very proud of what they have saved so far. Additionally, 25% of Gen Zers have savings of more than $10,000, demonstrating their commitment to saving and building wealth as quickly as possible.

What is the average income of Generation Z?

Income is a decisive factor in wealth creation. The average income of Generation Z is $32,500, which seems modest compared to older generations.³But it's important to remember that many Gen Zers are still in the early stages of their careers or balancing work and education. Despite their relatively low incomes, Gen Zers are making progress in managing their finances effectively. They budget, save and plan for the future – all important steps towards creating wealth.

Does Generation Z care about money?

Gen Zers show a strong concern for their financial well-being, but recognize that money is not the most important thing in life. They are focused on financial freedom and the ability to pursue their passions. For Generation Z, money allows them to experience life and focus on their financial goals, but getting a big paycheck isn't their top priority.