From Side Gigs to Stocks: What You Can Learn From Gen Z’s Creative Approach to Retirement
Gen Z, the newest entrants to the workforce, demonstrates a remarkable commitment to financial stability, even in an economy where inflation and escalating living costs pose significant challenges.
Part of their quest for financial stability involves saving for retirement. According to the Northwestern Mutual 2024 Planning & Progress Study, “The average age that Americans say they started saving for retirement is 31. But for Gen Z, it’s 22 — nearly a decade earlier.” Their hope is that they’ll be able to retire earlier because they started to save earlier.
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Their aspirations to be financially stable and retire early are goals they are actively pursuing. Here’s how they’re doing it.
They Have Profitable Side Hustles
The younger generation is not just waiting for things to improve with inflation. Instead, they’re taking action. Gen Z and millennials are showing their impressive drive and work ethic by picking up side gigs.
They understand that while working hard to achieve long-term financial goals is necessary, other factors, such as the state of the economy and having enough set aside for retirement, are pushing them to save up even more. Their proactive approach to financial management is something we can all learn from.
“55% of Gen Zers and millennials have a side hustle, averaging $1,253 a month in supplemental income,” per a recent study from LendingTree. “When asked what drove them to start one, 40% of these young Americans said inflation, while 38% cited economic fallout from the COVID-19 pandemic.”
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They Have Long-Term Side Hustles
Young Americans are picking up side gigs — doing everything from delivering groceries to podcasting, blogging, day trading, bartending, online freelancing and more. But this isn’t a short-term solution for many Gen Zers. They plan on hustling for the long haul to get ahead.
“Having a side hustle isn’t temporary for some,” the LendingTree study stated. “In fact, 48% of Gen Zers and millennials with a side hustle plan to always have one. That’s especially true for six-figure earners (59%), those with children younger than 18 (52%) and millennials (51%). Following that, 19% of young Americans with a side hustle plan to have it until they save a certain amount of money.”
You don’t need a degree for most side hustles, so if you’re in need of extra cash, or falling short on your retirement, use Gen Z as an inspiration to get a side gig and save up.
They’re Investing Early
While finance experts always recommend saving early for retirement and investing if possible, many people don’t because they’re not in a position to or they’re recklessly spending money in unnecessary ways. But not Gen Z.
According to a study from the CFA Institute, “Four in five (82%) Gen Z investors surveyed in the U.S. say they began investing before they turned 21, as did 79% of Canadian, 81% of U.K. and 63% of Chinese Gen Z investors.”
You can’t turn back the clock and invest early, but Gen Z can encourage you to research the best investment options for your financial situation and retirement plan.
They’re Digitally Savvy
Nowadays, with finance apps and online investing at your fingertips, it’s easier and more accessible to invest once you’ve educated yourself and become financially literate, which is what Gen Z is doing.
“The Gen Z population is diverse and digitally savvy,” Gerri Walsh, president of FINRA Foundation, said in the CFA Institute study. “They are using mobile technology to enter the financial markets in unprecedented numbers and consulting a wide range of information sources as they do so. It is vital to understand their investing decisions and to provide them with the educational tools to prepare for those decisions.”
They’re Learning the World of Finance From Social Media
The oldest Gen Zers are 27, and many are still learning the finance world, but the generation is using the resources available to them to learn better ways to invest.
“Almost half of U.S. Gen Z investors (48%) use social media to learn about investing,” according to the CFA Institute study. “It is the top information source for Gen Z investors in the U.S., Canada and the U.K. It is the fourth most popular option for those in China, with the top information source being financial apps.”
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This article originally appeared on GOBankingRates.com: From Side Gigs to Stocks: What You Can Learn From Gen Z’s Creative Approach to Retirement
