Tips for Gen Z to Manage Their Finances

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Navigating the world of personal finance is challenging for everyone, but especially for newer generations as they are forced to grapple with ever-high inflation levels. Gen Zers, aged 18 to 25, are facing unique financial challenges as they try to pay off their college debts and establish a career.

According to a survey by Intuit about Gen Z and money, 67% of Gen Z respondents feel that they will never have enough money to buy the things they want in life. Whereas 66% say they might never have enough money to retire. Such statistics indicate a dire situation that must be addressed promptly.

While you can’t change how the world economy behaves, you can take several steps to manage your finances and build long-term stability. Let’s take a closer look. 

Build a Realistic Budget

The topic of budgeting has a bad rap among Gen Zers. The idea of making a document that tells you how to spend your hard-earned money is outright obnoxious. So, how about you reframe your budget and see it as an indication of how much you can spend?

Start by adding up all your income sources and compare them to your current expenses, including housing, food, entertainment, transportation, and debts. Use the 50/30/20 rule to categorize your income into needs, wants, and savings. Increase the percentage of the “wants” bucket with things you wish to own or do.

When you have a realistic and likeable budget, financial planning will sound and become empowering, motivating you to save more. 

Focus on Understanding Financial Literacy

One of the biggest issues with saving money or managing finances is the lack of information. Gen Zers want to manage finances, but they don’t know how to do it or how to learn it. Many Gen Zers follow the financial advice of social media influencers, which might not be the best idea. 

Learn about taxes, investment opportunities, and debt repayment methods from certified individuals. Take financial literacy courses or watch lectures to gain financial knowledge rooted in facts, and not fleeting trends. 

Keep Debts to a Minimum

Getting a bunch of credit cards and swiping them whenever you feel like it—we’ve all been there. But when the credit card bills pile up, and you don’t have enough money to sort them out, the situation becomes terrifying. It can damage your credit history, making it difficult for you to acquire an auto loan or home loan later on. 

Remember that credit cards are tools, not a source of free money. Spend wisely and keep your debts to a minimum. Try switching to a credit card provider that offers bonuses or cashback.

Set Manageable Financial Goals

Saving money without having clear financial goals is not very effective. Research interest-bearing savings accounts to earn money while saving. First, set short-term goals, such as:

• A vacation fund
• A big purchase
• Covering a credit card bill

For long-term goals, you might want to save for a retirement account or an emergency account. Setting goals will give you a sense of direction and motivate you to keep moving forward.