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Exploring youth’s complex relationship with money


(INL Stock Image)

Praneeta Mahajan
Hamilton, June 6, 2024

With budget being announced last week, money management, funding and government policies have been a topic of discussion across all sectors.

But in the ever evolving landscape of generational attitudes toward money, Generation Z often faces scrutiny for allegedly being careless with their finances. Born between the mid 1990s and early 2010s, Gen Z has grown up in a world marked by economic uncertainties, technological advancements, and shifting cultural norms which is unlike any other generation before them.

Indian Newslink explores whether the perception of Generation Z as careless with money holds true.

Refresher
Financial literacy teaches young Kiwis self-management
Financial literacy leads to fiscal discipline and wellbeing

Understanding the Stereotype

The notion that Gen Z is careless with money may stem from the stereotype of a generation raised in an era of instant gratification and digital excess. However, this assumption oversimplifies the diverse financial behaviours within the cohort.

Financial journalist and author, Susan Carter, notes, “It is essential to recognise the diversity within Generation Z. While some individuals may exhibit careless spending habits, many others are prudent and financially responsible. Blanket generalisations obscure the nuances of their financial attitudes.”

Digital Spending Habits

With the rise of online shopping and digital payment methods, Gen Z’s spending habits are often scrutinised. Critics argue that the ease of digital transactions may lead to impulsive and careless spending.

However, financial analyst Mark Davis suggests, “Gen Z’s digital spending habits are not necessarily indicative of carelessness. It is a reflection of the changing landscape of commerce. Many are adept at leveraging technology for budgeting, tracking expenses, and making informed purchasing decisions.”

Financial Education and Awareness

To determine whether Gen Z is careless with money, it is crucial to assess their financial education and awareness. Experts emphasise the importance of financial literacy in shaping responsible financial behaviours.

Financial educator Dr Rachel Green highlights, “While there is room for improvement in financial education, Gen Z is not inherently careless. Many individuals actively seek financial knowledge, and educational initiatives can further empower them to make informed financial decisions.”

Author and educator, James Thompson, adds, “It is unfair to label an entire generation as careless. Lack of financial education and mentorship can contribute to perceived carelessness. Investing in financial literacy programs can equip Gen Z with the tools they need to navigate the complex financial landscape.”

Financial Literacy in New Zealand:

In New Zealand, financial literacy initiatives aimed at empowering young people, including Generation Z, have gained significant traction. The New Zealand government and various non profit organisations have recognised the importance of equipping this generation with the necessary financial skills to navigate an increasingly complex economic landscape. A number of programmes are aimed at providing comprehensive financial education to students, covering essential topics like budgeting, saving, investing, and managing debt. Additionally, partnerships between educational institutions and financial experts have led to workshops and seminars that offer practical financial advice and tools. These efforts aim to bridge the gap in financial knowledge, ensuring that Gen Z in New Zealand can make informed and responsible financial decisions. Financial literacy is seen not just as an educational objective but as a crucial life skill that supports overall wellbeing and economic stability for future generations.

Economic Realities and Challenges

Gen Z has entered adulthood against the backdrop of economic challenges, including the aftermath of the 2008 financial crisis and the uncertainties of the gig economy. These factors may influence their financial behaviours and decisions.

Economist Dr Laura Adams explains, “Gen Z faces unique economic challenges. Careless spending might be a manifestation of coping mechanisms or a response to economic instability. It is crucial to consider external factors that impact their financial choices.”

In her book ‘Navigating the Financial Maze: A Guide for Gen Z,’ financial advisor Emma Collins writes, “Gen Z’s financial challenges are real, but it is a mistake to equate that with carelessness. Many are adapting to economic realities by embracing financial resilience and exploring alternative income streams.”

Cultural Shifts and Priorities

Gen Z’s values and priorities often differ from those of previous generations. Their focus on experiences, social causes, and work life balance might be misconstrued as carelessness, particularly in traditional views of financial success.

Cultural analyst Dr Megan Harris comments, “Gen Z places a high value on experiences and meaningful connections. Their spending patterns may align with these values, but it does not necessarily imply carelessness. It is a redefinition of what financial success means to them.”

In the debate over whether Generation Z is careless with money, it is crucial to move beyond stereotypes and acknowledge the complexities within the cohort. While some individuals may exhibit less than optimal financial habits, many others are navigating the challenges of adulthood with prudence and financial responsibility.

As Gen Z continues to mature, providing support through financial education and mentorship can contribute to a generation that is not defined by carelessness but by informed and empowered financial decision making.

Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.

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