Generation Z: The rising generation

This article was co-authored by Betsy Kocour.

Millennials are leaving their mark in the financial and business worlds, but what about Generation Z?

These individuals born from 1995 to 2014 share many values with millennials, like prizing experiences over material items. However, they have a unique set of financial objectives and influences.

One reason is because Gen Z experienced the second-hand effects from the 2008 financial crisis. Growing up with their parents stressing over losing their retirement savings or their home caused these young people to have a more skeptical view of what the term “money” represents. They also actively avoid debt more than any other generation has at their life stage.

Let’s look at four tips that will provide this generation with peace of mind as they move towards stabilizing their financial lives.

1. Planning for retirement

For Generation Z, the first and easiest way to combat the stress surrounding retirement is to prioritize saving — specifically planning to save early in their career. Due to factors such as inflation and compounding interest (as this blog demonstrates), saving earlier and often puts Gen Z ahead in building up their retirement nest egg.

Whether saving in a 401(k) or an IRA, it’s essential to understand the differences between Roth and Traditional contributions. As Gen Z enters their early income-earning years, it’s often best they make Roth contributions to their savings vehicle. Roth contributions are taxed in the year they are contributed, allowing Gen Z to withdraw money tax-free in retirement. Traditional contributions allow tax deductions in the year the contribution is made and are then taxed upon withdrawal in retirement.

Another key component of retirement savings, specifically when contributing to a 401(k), is employer matches. To be sure Gen Z is using this vehicle to its full potential, they will want to contribute enough to their 401(k) to receive the match their company provides.

Finally, an effortless savings technique to prioritize retirement arises upon receiving a raise. When a person is already used to living without this additional income, contributing an increased amount will not crunch their cash flow and would push them to reach the maximum yearly contribution of $19,000.

2. Creating an emergency fund

Another savings technique that should be used to ensure the stability of day-to-day activities is to build up an emergency fund. Typically, three to six months of living expenses is a safe buffer. Having this cushion will leave Gen Z members feeling confident that they will not be overwhelmed, should something go wrong.

On the other hand, Gen Z early life high earners can avoid these five spending mistakes.

3. Tracking expenses 

As mentioned earlier, the term “money” carries a certain level of stress with Generation Z. However, they have a leg up on any other generation when it comes to using technology in reducing this stress.

These individuals grew up in an era where they were introduced to technology at a very young age, making them more adaptable and competent in navigating new software. They will be more equipped with the skills it requires to use online budgeting apps, such as Mint and Quicken.

Using these apps to their full potential will push Generation Z to stay on top of their expenses and ensure they have control over their financial lives. New technology will also allow them to keep on top of their cash flow to avoid large amounts of debt, which can cloud their financial vision.

4. Leveraging technology in decision-making

Technology also provides Generation Z with a leg up in their ability to use the internet as a resource when purchasing items. Gen Z is very diligent when it comes to spending. Due to the availability of Google and quick internet searches, they can compare pricing options and review testimonials in real-time before purchasing a product or committing to an event.

The role that YouTube plays in this process is also a driving factor — 85% of Generation Z watches one YouTube video a week. YouTube is a hub for information and provides visual testimonials that have a powerful influence on how they view new products and trends. The power this tool has to influence their decisions and behaviors will have a snowballing effect on their spending outcomes. 

Gen Z and financial advice

In the past, technology may have been viewed as a tool that distracts from learning, but looking into the future, it will be a driving factor that pushes this generation to be more efficient and resourceful in making any decisions that will influence their financial future. 

The financial stress that Gen Z carries will actually be a motivator for them to seek financial advice and rid themselves of the worry that surrounds these matters.

Overall, this generation of individuals is more focused on getting something out of every aspect of their life. That’s why, when it comes to their search for a trusted advisor, the most outstanding factor will be an offer of a unique experience and a structured plan. The way to capture this generation is by offering a personalized experience that leaves them fulfilled and more confident about their choices than before.

Are you curious about Wipfli Financial’s approach to financial planning and investment advisory?


What about the next generations? Read more articles here.

How Millennials Can Purchase a Home While Paying Down Debt
The Forgotten Generation: How Generation X Can Plan for Their Unique Future

Gen Z

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Lora Murphy

CPA, CFP®, CDFA™ | Principal, Senior Financial Advisor

Lora Murphy, CPA, CFP®, CDFA™, is a Principal, Senior Financial Advisor with Wipfli Financial Advisors in Milwaukee and Chicago. Lora specializes in estate planning, tax planning and complex financial planning for major life transitions, including divorce and the sale of a business.

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Generation Z: The rising generation

time to read: 4 min