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Millennials and Generation Xers have been plagued by debt since the early 2000s. But what about Generation Z? According to a new survey, they’re doing it better than their predecessors. Here’s how.
Gen Z is more likely to pay off their loans quickly or utilize promotional offers for personal loan balance transfers that allow them to pay off their purchases over time without accruing interest. Since Gen Z is coming into an unstable job market, they’re aware of how extra costs, like interest, can affect their budget, making them less likely to take on unnecessary debt.
Gen Z is more likely to carry around extra cash and use it for emergencies or unexpected costs such as car repairs or tuition bills. This approach to managing finances can help them avoid getting into a cycle of debt where they are constantly struggling to pay off large amounts of interest.
Gen Z is also more likely to prioritize their expenses and find ways to save money on necessities like food, transportation, and utilities. This strategy can help them build a financial buffer that can be used during difficult times or emergencies.
Gen Z is also more likely than other generations to research different types of loans and credit products before taking out a loan. This approach can help them avoid taking on high-interest debt products that could spiral out of control.
If you’re struggling to pay off high amounts of interest on your debt, it might be helpful to consider some of the strategies that Gen Z is using to stay afloat. For example, they may prioritize their expenses and find ways to save money on everyday items. Additionally, they may be more careful with their spending and use their financial skills wisely.
While they’re certainly doing better than older generations for things like debt and interest, Gen Z still has a lot to learn about money.
One critical factor that seems to be lacking in financial education for Gen Z centers around planning for the future. Many surveyed admit saving very little for retirement or putting money aside for appreciating assets such as home ownership.
While it’s essential to keep things like debt and spending under control, Gen Z should also aim to save for a rainy day, invest for the long term, and work towards owning some sort of property in the future. It’s true that the current real estate market is grim, but this doesn’t mean homeownership is permanently out of their reach. As the market cycles, more opportunities to purchase property become available for those who are prepared for it. Believing that renting will be their only option puts them at a disadvantage when the market inevitably rebounds.
It’s clear that Gen Z needs to utilize all its resources to get ahead financially, and they’re making good strides to do so by staying away from debt as much as possible. Practicing responsible spending and saving habits while investing in long-term goals will help them build a solid foundation for success.
