Gen Z is saving money at a higher rate than older generations did at their age. And they’re saving for more important goals, not just meals out and online shopping.
That’s according to a study from The National Society of High School Scholars. Meanwhile, money management app Current reports that 80 percent of them are saving for big-ticket items, like cars, clothes, and college.
The NSHSS survey finds that Gen Z is looking to steer away from student loan debt like millennials before them. Instead of going to the best university, this generation is looking to attend the right school for them.
“The millennial mindset was to attend the best college possible,” NSHSS reports. “Many paid with loans and are now burdened by school debt. Gen Z has witnessed the student debt crisis and seems to be putting more focus on paying as they go.”
Where are teens putting their money?
While older generations are drowning in $1.4 trillion of student loan debt, Generation Z wants to pay their way through as much as possible to avoid borrowing for school. Eighty-eight percent plan to get grants and scholarships to help pay for college costs.
The survey profiled more than 16,000 Gen Z students, with a quarter of them already in college. Nearly half were 18 years of age or younger. Overall, young people have high hopes for themselves, their schools, and their future employers.
“Generation Z holds themselves and their employers to high expectations, anticipating that they will find themselves in meaningful employment within six months of college graduation,” the report says. “They feel the financial pressure of the era they are born into, and are making plans accordingly.” In other words, Gen Z is saving money.
Gen Z is saving money for the future and beyond
That financial pressure is helping shape their money goals at a young age. More than one-third of respondents say they expect to start saving for retirement in their 20s (10 percent started saving as teenagers).
The survey says 70 percent of respondents are contributing to their college education from a job they have while in school, while 49 percent are paying through their own savings. Young people are proving that saving early goes a long way for not only their education but their goals in general.
It’s not just the act of saving, but how they are saving, too: 83 percent of teens are tracking their savings goals. Most are in it for the long haul, as they expect to be saving for more than a year to meet goals.
What Gen Z is saving money for…
- A new phone or electronic device: 65 percent
- To hit a goal of $2,500 or more: 49 percent
- Have a goal of less than $250: 31 percent
- Their own cars: 17 percent
- College: 11 percent
“Contrary to expectations, this generation of teenagers is turning out to be more entrepreneurial, savings-conscious and fiscally savvy than past generations,” says Current’s CEO Stuart Sopp. “This research shows that, when given the right tools, they are making smart decisions.”
Teens are taking their money into their own hands, which is vital, considering their parents don’t know enough about personal finance to teach them. Even more, financial literacy isn’t required to be taught in schools, so kids are left to their own devices on how to handle money.
To learn how to better handle money and reach your financial goals, check out Debt.com’s Money Management Solutions.