5 Financial Steps Gen Z Should Be Taking Now
Gen Z is getting older. Ranging from 9 to 25 years old, even the youngest "zoomer" is starting to understand the concept of money and how it plays into our everyday lives. While members of this generation may lack financial experience, they have one crucial asset on their side: time.
See: 7 Moves Gen Z Should Be Making To Protect Themselves Financially
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"When it comes to taking steps to ensure future financial success, Gen Z is in the best position of any current generation. Why? Because they're the youngest, and they have the most time to save and invest," said John Stoj, founder of financial advisory company Verbatim Financial.
To begin, Stoj recommends opening a bank account and, much like a squirrel before winter, loading it up with your spare change when opportunity provides. Here are five other steps Gen Z can take to build lifelong money savviness.
Learn: How To Open a Bank Account Online: Everything You Need To Know
Last updated: Sept. 13, 2021
Learn To Cook (at Least the Basics)
"Eating out can be convenient, social and satisfy pretty much any craving. It can also tax your time, wallet and take a toll on your nutrition. One of the best investments you can make, both for your financial and personal health, is to learn to cook the basic things you enjoy yourself," said Kyle, owner of personal finance blog The Inimitable Path.
"Need one more reason? A study detailed at TheLeague.com shows that being able to cook makes you more attractive to both women and men: 'An analysis of over 3.7 million dating profiles performed by Zoosk found that both men and women are more likely to message potential partners…when people mention a love of cooking in their profiles.'"
Find Out: Surprising Ways Gen Z and Millennials Are Worlds Apart Financially
Create a Budget
"Create a budget and stick to it. Use a spreadsheet or free budgeting apps and software to track your income and expenses. Even if you don't have many expenses, it can be shocking to see how much you spend in certain areas, such as buying your morning coffee. Learning to budget now is critical for budgeting in the future when you add in a mortgage, car payments, loan payments, utilities and other major expenses," said Erica Seppala, financial analyst at Merchant Maverick.
Budgeting 101: How To Set a Realistic Budget You Can Live With
Make a Plan for Your Student Loans
"Make sure that you’re on the right loan repayment plan that fits your personal circumstances," said Brian Walsh, senior manager and certified financial planner (CFP) at SoFi.
"If you don’t make payments that cover your monthly interest, your loan might end up getting bigger. If your repayment plan doesn’t work for you, refinancing your student loans with a provider like SoFi can help secure a lower interest rate or better repayment terms, which add up to larger savings over the life of your loan. This can benefit new grads who have secured a well-paying job or have a better financial situation and credit score than when they originally took out the loans."
Take a Look: What To Do If You Can't Afford Your Student Loan Payments
Don't Take Surface-Level Financial Advice
Making rash decisions with money is almost never a good idea. If you get your financial advice from TikTok or any other social media platform, make sure you back it up with research or the opinion of someone you trust before you act on it.
"Do not get lured into speculative investments based on the fear of missing out," Jason Dall’Acqua, CFP and president of Crest Wealth Advisors, added. "Cryptocurrencies and Reddit trends are grabbing a lot of headlines these days, but these are extremely risky investment strategies that should only be considered once you are on strong financial footing. Instead, be prudent with your financial decisions and only invest when you have the basics in place."
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But Do Invest
"Gen Z investors have over 40 years until their full retirement age and hold two key factors to their advantage: timing and compound interest," said Chance Burroughs, CRPC, CFS and financial advisor at Manske Wealth Management.
Guide to Investing: What First-Time Investors Need To Know
"401(k) retirement plans with the potential for an employer match are great investment vehicles that will provide you savings toward retirement, and even a first-time home purchase. Taxable brokerage accounts are great vehicles to invest in if you want access to your contributions and potential gains without having to worry about early withdrawal penalties. The more and longer you contribute, the better results you will have toward your end goal."
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This article originally appeared on GOBankingRates.com: 5 Financial Steps Gen Z Should Be Taking Now
