A new study conducted this year shows that a mere 16% of the millennial generation are financially literate. To test this, fundamental questions covering various concepts such as numeracy, inflation, and diversification, were used to ask Americans. The results proved that even millennials who identified as “financially literate” were challenged in the aspect. The report states that millennials, aging from 18 to 37, “demonstrate lower basic financial literacy levels while at the same time being more likely to overestimate their own financial knowledge.”
On the other hand, the younger generation, commonly called Gen Z, has seen millennials’ financial struggles and are learning from their experiences. Both age groups have experienced almost unavoidable debts because of the significant increase in the costs of education, housing, and personal expenses. Still, experts believe that members of Gen Z are likely to be more prepared to face many of these financial hurdles. If that’s the case, what financial tips and advice can they give millennials?
Find New Ways to Save Up
We can start with the most basic advice, which is saving hard-earned money. A survey by Ernst and Young reports that Gen Z makes more effort to prioritize saving their income than millennials, as 57% of the younger generation would rather save their income than spend it right away. Gen Z views debts as a social shame, so priorities to keep away from them and save their income are being made whenever and wherever they can.
Luckily, there are numerous ways to do this. For example, instead of dining in restaurants, a simple packed lunch can save a lot of money. When doing groceries, it is also ideal to make and stick to a list and always use coupons. The emergence of digitalization also makes saving money easy and realistic. Many mobile applications offer financial advice and technologies to further automate savings. As long as there are commitments and goals, saving money will be as easy as 1-2-3.
Maximize Options of Earning Money
Studies also show that Gen Z is more financially aware, as evidenced by their constant utilization of online money-making opportunities, whether for full-time or part-time. Approximately 22% of this generation is earning money online, as reported by Lexington Law. Many in Gen Z resort to vlogging or writing for blogs, where they earn considerable money via affiliate marketing, advertisements, or product sales. Selling handcrafted products, designing websites, testing mobile applications, or other freelance jobs, are among countless opportunities that Gen Z has taken advantage of to achieve their financial goals. Millennials can also use some time to gain the necessary digital skills, and of course, a stable internet connection, to help them earn money online.
The most common millennial jobs are service occupations. For example, efficient bartenders snagged the most popular job for millennials in 2017, with potential earnings of up to $21,690 annually, while waiters and waitresses can earn a median annual wage of $20,820. These roles are not the highest-paying jobs, making having a side hustle an ideal way to earn additional income. Some of the most profitable side hustles include blogging, freelance writing, running a social media page, virtual assisting, content creation, or delivering for PostMates.
However, there are a lot more passive opportunities for occupied millennials to explore. Hosting an Airbnb has the potential to help consistently earn cash of up to hundreds of thousands each month. Ride-sharing services like Lyft or Uber can also drive a pretty good amount of sales. No matter what the side hustle is, the most important thing is you are earning extra cash to pay your debts, save for an emergency fund, or fulfill payments for your dream house.
Learn To Invest Safely
Members of the Gen Z population are also often considered to be more conservative and careful with their investments compared to millennials and other older generations. Dallen Haws, a financial planner at Haws Financial Planning, noted that the younger generation is more inclined to invest in smaller but more consistent financial achievements, and are more likely to see their efforts pay off over time. A steady and consistent investment is always better than wasting money on “lottery tickets.”
The way every generation handles financial matters has been observed and studied. Needless to say, it is difficult for millennials to come of age and enter the job market during the Great Recession (circa 2008), a challenging time filled with even fiercer job competition. In the middle of a pandemic, it is also harder and tougher to manage finances due to job loss and higher cost of commodities. With this, millennials can also learn from Gen Z. Every new generation is different from the one that preceded it, but attaining financial comprehension from each other is realistic — it just takes time, attention, and will power.
