Almost half of Gen Z does not save money for emergencies. This is also due to significant societal and economic pressure. A great dissatisfaction within the generation leads many to see little sense in saving money.
What kind of survey is this? The team behind the financial app “Frich” conducted an anonymous data analysis of its community of one million “Gen Z” users and examined the sentiment regarding savings goals, money concerns, and attitudes towards financial emergencies:
- Almost half, 47%, of Generation Z has no emergency fund and does not save.
- Only 29% of the surveyed participants are actively saving. Those who do save are 80% below the amount recommended by Frich, averaging only $6,820. This equals about 6,500 euros.
Instead of saving money, Generation Z prefers to spend their money directly and lavishly, a behavior also known as “doomspending”: the reckless spending of money. Many find saving to be pointless (via crowdfundinsider.com):
44% have already maxed out at least one credit card. Instead of saving for the future, they prefer to spend money.
Those who save often save for big goals and ask family or friends for help
What are savers saving for? Most individuals who do set aside money have big dreams they want to fulfill:
- 21% of Generation Z state in the survey that they are saving for a house.
- 17% are saving for a car.
- 13% are saving for their own education.
Most of them would also either ask a family member for money (31%) or ask a friend for money (25%). A quarter of respondents (25%) would be willing to go into debt. Additionally, many young people assume that they need to save millions to be financially secure.
Why do so few want to save? The magazine Fortune reports that this is primarily due to dissatisfaction within the generation: One of the many mental hurdles that members of Gen Z report is that savings feel pointless when no one listens to their frustrations and instead lectures them without understanding the thoughts behind their actions.
Aleksandra Medina, co-founder and CPO of Frich, explains that the situation for Generation Z is different than it was 20 or 25 years ago. The high societal and economic pressure makes saving more difficult:
Many in Generation Z are on a financial tightrope, torn between covering immediate expenses or saving money for emergencies and paying for goods on credit. The resurgence of financial pressure leaves Generation Z little room to save in the same way previous generations did.
Little willingness to help among the generation when it comes to money
It is also surprising that many respondents from Gen Z state that they are not willing to help others: 76% say they would not lend money to their partner. On the other hand, only 17% are willing to ask their partner for financial support.
Gen Z and the so-called Boomer generation differ significantly from each other, even in the purchase and consumption of certain goods. This is also evident in a direct comparison of the generations. We present things that “Boomers” use or buy daily, which play almost no role for Generation Z: 6 things Boomers spend money on every year that Gen Z would never do today
