I’m a Banking Expert: Gen Z Banking Habits That Retirees Should Learn From
Michael Ashley is a financial planner and the founder of the financial services platform Ashley Insights, which provides business integration, internal strategy, IT project management and chief of staff and business administration services for the financial industry. He previously spent years as a bank employee at Wells Fargo and Citi, two of the largest financial institutions in the country and the world.
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Over the course of his career, he’s witnessed generational changes in banking habits as young financial consumers adopt new technology and adapt to changing trends and economic conditions. Older customers tend to stick to what’s always worked for them and leave emerging trends to the young — but he’s seen firsthand how that can be a self-defeating philosophy.
Despite Gen Z’s lack of experience, it turns out that the youngest adults are getting a lot right in the realm of money management and using the banking system to the fullest — and boomer retirees would be wise to take note.
They Get the Most Out of Digital and Mobile Banking
According to a recent Pymnts study titled “What Generation Z Wants From Their Bank,” “For every Generation Z consumer, there’s a parent or grandparent Venmoing them money.”
Even if that’s an exaggeration, the idea that older generations are open to adopting the banking technology of the young leaves room for optimism — after all, it has served the young well.
“Gen Z is highly adept at using digital banking tools, from mobile apps to online banking platforms,” said Ashley. “They use these tools to manage their finances efficiently, monitor their accounts in real-time and make transactions without the need to visit a physical bank.”
According to digital banking solutions provider Alkami, Gen Z knows it’s surrendering massive amounts of personal data by adopting digital-first banking — but they’re doing it intentionally in exchange for a more personalized, customized and intimate banking experience.
“Retirees can benefit greatly from this habit, as it offers convenience, reduces the need for physical travel and provides quick access to account information and banking services,” said Ashley. “Embracing digital banking can help retirees stay on top of their finances more easily and securely.”
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They Link Their Budgets to Their Banking Apps
Savvy retirees live according to a budget — but those budgets often exist independent of their banking lives. However, Ashley notices that Gen Z doesn’t erect walls between budgeting and banking and instead allows their financial lives to flow freely between the two. They use banking apps to manage their money in conjunction with — not separate from — budgeting apps to track their income and plan their spending, saving and investing.
“Gen Z frequently uses budgeting and personal finance apps to track spending, set savings goals and manage their money effectively,” said Ashley. “These apps provide visual breakdowns of expenditures, alerts for upcoming bills and personalized financial advice.”
With fixed incomes, required minimum distributions, fluctuating health care costs and annual Social Security COLAs to stay on top of, retired boomers could benefit from following suit.
“Retirees can adopt this habit to gain better control over their finances, ensure they stay within their budget, and make informed decisions about their spending,” said Ashley. “Budgeting apps can be particularly useful for managing fixed incomes and planning for future expenses.”
They Invest Early and Often
Gen Z came of age in the era of democratized investing, an advantage boomers did not enjoy as young adults, when putting your money to work was expensive, hard to access, confusing and contingent upon the services of pricey professionals like commissioned brokers and fee-based fund managers.
The younger set has taken advantage.
“Gen Z is increasingly aware of the importance of investing and often starts investing at a young age, using platforms that offer easy access to stocks, ETFs and other investment vehicles,” said Ashley.
According to Corebridge Financial, roughly half of baby boomers did not seriously start financial planning until after the age of 35, and more than a third delayed until they were 40 or older. By contrast, 73% of Gen Z report starting to take their finances seriously between 18 and 25 — and they invest whatever they have like their retirement depends on it.
So, what does this have to do with people in their 60s, 70s and beyond, who have already passed their earning years?
“Retirees can learn from this approach to investment,” said Ashley. “Even if starting later in life, utilizing accessible investment platforms can help retirees grow their wealth, generate passive income and better prepare for unexpected expenses. By learning to navigate these investment tools, retirees can diversify their financial portfolio and potentially increase their financial security.”
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This article originally appeared on GOBankingRates.com: I’m a Banking Expert: Gen Z Banking Habits That Retirees Should Learn From
