Gen Z and Millennials are Desperate for Financial Advice

Posted on Monday 18 October 2021

Gen Z and Millennials are Desperate for Financial Advice

Financial advice is important at any age, particularly in your formative years. For Gen Zs and millennials, gaining financial clarity must start now.

Who are Millennials and Gen Zs?

Younger millennials are in their late twenties and early thirties, while the oldest members of Gen Z are 24. Far from being the carefree avocado-toast fans they once were portrayed as, the oldest millennials are on the cusp of turning forty this year. They experienced some massive financial and technological shifts firsthand. One of such is the housing market crash of 2008 and the resulting recession.

On the other hand, Gen Zs are fresh out of the gate. They are best known for embracing the full breadth of technology and the internet. This is expected, as they have never experienced life without the internet.

Though there are two decades between millennials and Gen Z, it's different with finances. When it comes to learning about financial management, these two generations can use the same manual. Millennials had to live with the housing bubble and the repercussions of an overseas war after 9/11. On the other hand, Gen Zs have to deal with the massive economic inflation that's accompanied the global covid pandemic.

Both have to handle massive swings in the housing, employment, and investment markets. There's also a lot of uncertainty around what happens in the global market. Added to this, these generations have many financial trends to subscribe to, such as investments, NFTs, cryptocurrency, and payday loans.

How do millennials and Gen Z get financial advice with so much financial uncertainty? What does managing personal finances mean for these younger generations of consumers? All these are important if you are a young person looking to make your money work for you.

Here are a few effective ways for Gen Zs and millennials to learn about making, holding onto, and growing their finances.

Going Digital for Financial Advice

When it comes to investing, younger consumers favour going digital. Of course, financial services companies are taking note of this. For instance, Vanguard released a digital-only financial advice service catering to younger investors. Two-thirds of users are either millennials or Gen Z.

Similarly, robo-advisors like Wealthsimple put investing and money management at your fingertips through an app. Because robo-advisors make investments for you, they’re a great way for millennials and Gen Z to let the money grow without the technical know-how of the stock market.

Even better, investors don’t need to get on the phone or sit boring hours before a financial advisor. Instead, you simply open the app, and your finances will be accessible 24/7.

Online platforms like Wealthsimple even offer instant money transfers between users, free of charge. It’s a one-stop-shop that offers investing, transfers, and advice on how to invest, save and even buy a home.

It’s hard to deny the ease of managing your finances through a platform accessible 24/7 through your smartphone. Besides, getting financial advice from a real-life human may be the MO for the older generations, but it isn't important to most Gen Z and millennials. This has played a huge role in the shift to digital financial advice and money management.

Social Media in Full Swing

Millennials may be old enough to remember a time without social media. Still, they also came of age during the boom of social media platforms like Facebook and the now discontinued Myspace. Millennials embraced social media entirely. Millennials took these platforms from being places solely for writing recipes and posting catalogues, to journals for recording their daily lives.

And for Gen Z, there has never been a time without the internet. Phones have always been smart, influencers are the norm, and social media is a powerful part of their identity and relationships.

It’s hardly surprising that social media is a driving source of financial advice for both generations. While millennials may prefer classic platforms like Facebook, Gen Zs latch onto newer platforms like TikTok. What's clear is that both generations share a passion for finding advice through reels, influencers, comment threads, and shared articles.

According to 2021 survey data, the top social media platforms that millennials and Gen Z use for financial advice include:

  • TikTok
  • Instagram
  • Snapchat
  • Facebook
  • Twitter

While certain platforms are more popular for one generation than the other, 75 percent of survey respondents report using social media to follow specific content creators who focus on financial topics. The most popular financial topics for Gen Z and millennials include:

  • Budgeting
  • Taxes
  • Credit card debt
  • Credit card points and rewards
  • Investing
  • Buying a home
  • Bank accounts and credit cards
  • Car insurance
  • Cryptocurrency
  • Student loans and bad credit loans in Toronto (Toronto seems to be a popular city with the Gen Z crowd).
  • Retirement

Why Is Financial Advice So Important for Millennials?

Millennials face a unique challenge in learning about personal finances. Most millennials grew up without financial literacy. In a recent Global Financial Literacy Excellence Center study, only 24 percent of respondents demonstrated basic knowledge of financial concepts like investments and inflation. Almost 30 percent were overdrawing on their checking accounts.

Student loan debt is perhaps the biggest financial challenge that millennials face. In 2019, more than 60 percent of student debt insolvencies in Canada were filed by millennials. And with the average student loan debt at more than $26,000, it’s not hard to see why millennials are strapped for cash. Working with new payday loan companies to improve finances helps, but learning long-term financial tips is always best.

Why Is Financial Advice So Important for Gen Zs?

Gen Zs have unprecedented access to financial advice, tools, and platforms. Also, the current prevalence of digital-only financial management has made it easier for young adults to gain financial literacy. But without the right guidance, Gen Z is at risk of suffering the same financial challenges as millennials.

COVID-19 has thrown a huge wrench in personal finances across the globe, especially when it comes to job security. As of April of 2020, nearly 500,000 Canadian workers aged 15 to 24 had lost their jobs. That’s a huge hit for the younger generation, particularly during a time that young adults should be getting exposed to the best financial practices that will carry them through life.

The unemployment crisis extends to career-building elements like internships, study abroad programs, and work placements for young Canadians. Besides, coming of age during a recession will impact the wages that Gen Z workers earn. On average, wages will likely stagnate for 15 years which will have a ripple effect on housing, living, and working.

Although millennials and Gen Z both have a big mountain to climb, there are plenty of opportunities out there for great financial advice. Though COVID-19 has thrown no shortage of wrenches, there is one small consolation. If any generations are built to handle extreme financial changes and evolving technologies, it’s Gen Z and millennials.