Generation Z is entering the workforce facing rising inflation, a crumbling economy, and mounting student loan debt with no relief in sight. Things are so bleak that parents of Gen Zers are seeing a significant impact on their own finances, with 67% of Gen Z receiving financial support from their parents, according to a recent Credello survey.
As a recession looms and the job market remains volatile, it’s more imperative than ever before for young adults to start off on the right financial foot. Enter Jamila Souffrant, author, host of the Journey To Launch Podcast, and a personal finance expert with a wealth of insight into how Gen Z can work toward financial wellness. She offers practical guidance on budgeting and debt management through her course, The Budget Bootcamp. In partnership with Secret Deodorant’s No More [Financial] Secrets campaign, she’s on a mission to help Gen Z navigate all things finances.
Gen Z is up against a host of economic challenges
Raised on the internet and entering adulthood mid-pandemic, to say that Gen Z is unique would be an understatement. The most significant economic challenges facing Gen Z, however, are anything but new.
“The burden of student debt weighs heavily on this generation, impeding their ability to save and invest,” Souffrant tells Credello. “Additionally, the rising cost of living, particularly housing, healthcare, and education, outpaces wage growth, making it increasingly challenging for Gen Z to build wealth.” (Sound familiar?)
Though generations prior have faced similar challenges, many young adults are still struggling to get ahead in today’s tough economic times. Though more information than ever before is widely-available online, wading through a sea of misinformation to find tangible advice is often frustrating and confusing. And that’s just the tip of the iceberg, according to Souffrant.
“Economic inequality is also a prevalent issue. The lack of sufficient financial literacy education leaves many Gen-Z individuals ill-equipped to manage their finances, make informed decisions, and plan for their financial future,” says Souffrant.
“Studies indicate that Black and Hispanic women often face greater unmet financial needs, higher levels of student loan debt, and more financial challenges during their educational journey,” she continues. “These disparities can significantly affect a woman’s overall financial trajectory, which is why my partnership with Secret is so important because we can provide practical, tangible free financial resources and education to young women who need it.”
Black women earn 58 cents for every dollar earned by white, non-Hispanic men, which means Black Women’s Equal Pay Day will occur on September 21, 2023. Hispanic or Latina women earn 54 cents on the dollar, making Latina Equal Pay Day take place on October 8, 2023.
How a financial cleanse can help Gen Z weather their financial challenges?
So, what can be done to help give young adults a leg up? According to Souffrant, a financial cleanse is a solid starting point. “A financial cleanse offers Gen-Z attain long-term stability by raising financial awareness, setting clear goals, and breaking the cycle of debt,” she explains. “With a cleanse, they can develop essential skills in budgeting, saving, and debt management.”
Much like a cleanse done for health benefits can provide a fresh start and a clean slate for building better habits, a financial cleanse works similarly, but with money. Taking stock of your income, debt, and expenses, setting economic goals, and working on a plan to achieve those goals can set Gen Z up for long-term success. “This process cultivates healthy financial habits and resilience while emphasizing the importance of building an emergency fund and engaging in long-term planning,” says Souffrant.
Part of that long-term planning includes chipping away at existing debt. For Gen Z, that’s likely student loan debt, auto loans, or credit card debt. When working to pay off debt, Credello’s debt payoff calculator is a simple way to help see clearly the amount that can realistically be put toward debt repayment each month. It can be used for any type of fixed loan to compare debt repayment plans like the debt snowball and avalanche methods.
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Gen-Z doesn’t have to struggle through financial uncertainty alone
One secret Gen-Z can use to power through financial challenges? Support. Unlike any generation that’s come before them, Gen-Z has the backing of support through a wealth of knowledge and resources right at their fingertips. They just have to know where to look.
The women of Gen-Z, in particular, can gain an incredible amount of financial understanding by learning from and leaning on the women who have come before them. “Through access to resources and support from initiatives like Secret secret.com/moneymoves, Gen-Z women can gain confidence and control over their finances, paving the way for a more secure financial future,” Souffrant says.
This type of generational support is like an untapped superpower. It’s not just your mom handing you a checkbook and wishing you luck. Gen-Z has access to an internet full of successful individuals sharing their tips and insight to help the next generation build a solid financial foundation.
Building financial resilience, the Gen-Z way
When faced with tough economic challenges, it can be extremely tough to soldier through and set yourself up for success. This is especially true for those just starting out on their financial wellness journey — or, like Gen-Z, embarking on adulthood in general.
Financial resilience doesn’t always come naturally. Like a muscle, it has to be built up. Below, Souffrant shares her top ways to build and strengthen economic resilience:
1. Create a budget: “Establish a budget to track your income and expenses. This allows you to prioritize essential expenses, identify areas where you can cut back, and allocate funds towards savings and emergency funds. As part of Secret’s free resources, we have free budgeting tools and courses to help with this.”
2. Enhance financial skills and knowledge: “Educate yourself about personal finance and improve your financial literacy. Understand concepts like investing, saving for retirement, and managing credit effectively. This knowledge empowers you to make informed financial decisions.”
3. Build marketable skills: “Invest in developing skills that are in demand in the job market. This can increase your employability, open up new career opportunities, and enhance your earning potential.”
4. Foster a supportive network: “Surround yourself with a network of supportive individuals, such as mentors or peers, who can provide guidance, share experiences, and offer advice on financial matters.”
Gen Z faces significant economic challenges, but a financial cleanse offers a powerful solution for building long-term stability and overcoming debt. By embracing financial awareness, setting clear goals, and developing essential skills in budgeting, saving, and debt management, Gen Z can create healthy financial habits and build ample economic resilience. There’s no better time than the present for young adults to take action and leverage available resources to embark on a journey toward a successful financial future.