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Generation Z Is Smarter About Money Than You Are

The post-millennial generation is all about saving money, finding the best deals, and planning for the future.
Illustration by Koji Yamamoto

New leaders are emerging from what is shaping up to be a powerhouse generation: From Never Again activist Emma González, to Haile Thomas, who founded the HAPPY Organization to promote healthy eating and exercise habits, Mihir Garimella, who is developing search-and-rescue drones, and Xiuhtezcatl Martinez, who is suing the US government for climate change negligence.

Loosely defined as people born between the mid-1990s and the mid to late 2000s, the group goes by many names—iGen, the Homeland Generation, the Plurals—but Generation Z remains the most popular catchall term.


So-called "digital natives", Gen Zs were wholly forged in the internet age; their worldview is moulded by the profound shifts in geopolitical culture after the September 11 terrorist attacks, and the financial insecurity brought on by the Great Recession. As demonstrated by the poise and candor of the teen survivors of the recent school shooting in Parkland, Florida, they care deeply about social causes, but they’re also pragmatic in their approach to resolving these issues.

Nearly four out of five members of the generation identifies as liberal or moderately liberal on social issues, according to the 2016 report Generation Z Goes to College by University of Arizona researchers Corey Seemiller and Meghan Grace. But these young people are a different breed from millennials when it comes to fiscal matters, with 83 percent identifying as conservative on money issues.

“They’ve spent their childhood years in the Great Recession,” Jeff Brauer, a political scientist at Keystone College who has extensively researched Gen Z, told me over the phone. “Their parents were very open about it. They had to make sacrifices that the millennials didn’t have to make—simple choices about going to summer camp or not, paying for school trips, going to sporting events.”

They also understand harsh financial realities. “The kids saw that some of their parents, or their parents’ friends, lost their jobs—good people who are doing all the right things, who went to college, got an education, worked their way up, and all of a sudden they were laid off,” Brauer added. “There’s a distrust in the economy and distrust in traditional institutional employment."


And now that the older edge of the group is voting, graduating college, and entering the workforce, it’s increasingly possible to assess their influence on society. Here are some of the ways that this ascendent generation, which includes an estimated 60 million Americans (about a fifth of the entire U.S. population) will shape the future.

Saving > Spending

One of the most dramatic shifts revealed by voting data is that Gen Z prefers a conservative approach to economic matters. When it comes to their own finances, that means they'll do anything to avoid debt and are saving for retirement at a younger age than their parents.

Their innate frugality and internet savvy makes them pros at finding great deals too: “They know they can always get a better deal. They are very aware of value and they want to get the most out of their money from that sense of growing up in uncertain times," Brauer said. And that, in turn, makes them a much tougher sell from a marketing perspective.

Gen Z's fiscal conservatism also has political implications: “The youth vote has been shifting much more to the right and that says that Gen Zs are starting to have an impact,” Brauer said. And their distrust of big institutions may lead them to push for improved government accountability on financial matters and to rein in profligate spending. But since most can't even vote yet, it's too soon to see know for sure how that sentiment will play out in the public sphere.


Pragmatic Solutions > Political Extremism

There’s a joke in 30 Rock, Tina Fey’s Saturday Night Live-inspired series, in which the archetypal bad ex-boyfriend character Dennis Duffy proclaims himself to be a “social conservative, fiscal liberal”—implying that this is the most absurd of political configurations.

Gen Z appears to be just the opposite, which means neither the Democratic or Republican parties are a perfect fit for them. While the GOP is traditionally identified as the party of fiscal conservatism, that reputation has been squandered in recent decades, leaving Gen Z looking for options outside of the two-party system.

“I think that Republicans have a better chance [with Gen Z] than they’ve had with millennials, and that Democrats can’t take them for granted,” said Brauer, who added that youth culture has gotten more fiscally conservative in recent years as Gen Zers have begun coming of age. For now, however, "they are definitely moving more in the direction of independent. They haven’t linked themselves to one party or they other,” he said.

Averse to political extremism, what Gen Z wants instead from its leaders is well-researched solutions mediated through a cooperative process. “Part of our hypothesis is that these kids will help stabilize the extremism that’s happening in the parties,” Brauer said. “If either party plays their cards right, and move to the middle, they’ll have a better chance of attracting them,” he added.


Job Loyalty Is Out

Gen Z kids have witnessed many of their elders kicked to the curb by companies to which they dedicated years or even decades of their lives. As a result, they don’t trust the traditional idea of getting a 9-5 job with comfy benefits because they’ve seen that this is a fickle promise when times get tough.

They’re also more digitally adept than any generation, and can shop for jobs as easily as they shop for clothes, so employers will have to compete for them and accept that they will be always on the hunt for new lines of income, according to David Stillman, co-author of Gen Z @ Work.

"The difference with this generation is that they won’t see getting a job or pursuing income-generating hobbies as an either/or," Stillman told the NY Post. "They will likely try to do both. If employers push back, you’ll hear, ‘If it’s not OK to work on outside projects during the day, why is it OK for you to email me after hours?’"

Entrepreneurship Is In

Moreover, Gen Z is entrepreneurial; a multigenerational survey of 2,000 people conducted by the employment site Monster found that 49 percent of Gen Z respondents wanted to own their own business compared to an average of 32 percent in other generations.

Many have identified good market niches or founded startups before they’re even out of grade school, like sisters Caroline and Isabel Bercaw, who founded a bath bomb company, DaBomb Fizzers, before they were even teens, and 15-year-old Mo Bridges, who runs his own bow-tie company, Mo's Bow Ties.

To make sure their new ventures are a success, Gen Z is also demanding more accountability from educational institutions in terms of helping them find jobs after they graduate. Three out of five want to learn about entrepreneurship and business ownership in university, according to a 2014 Northeastern University survey of over 1,000 teenagers. Colleges are gradually responding to that demand by adding more finance-focused options.

Even those who don't plan to start their own businesses want to make sure that their education is more closely aligned to their future careers. “One of the things that they’re interested in is a much more practical education,” Brauer told me.

So while millennials have dominated public attention and market research over the past few years, Gen Z is now coming into its own as a generational juggernaut—large, diverse, and eager to remake society in line with their values. Their unique sensibilities will have enormous implications for our future world.