Gen Z in India and their financial independence

 

Generation Z is made up of people who were born after 1995. They are the first generation of their own kind. They have grown up with laptops, smartphones, and the internet. As the oldest members of Gen Z are reaching the age of college, paying attention to them becomes a significant responsibility of their parents. Now the main concern regarding this generation Z people is how they think about money and their financial literacy. Thus, banks around them are trying to make connections with this generation of people.

Recessions, the housing bubble burst, and seeing millennials struggling with college and various other kinds of financial debt have influenced these people. As a result, financial literacy is very important for people in this generation. According to the latest study by Raddon, it has been significantly found that around 2/3^rd of a group of 2500 teens have already opened up a savings bank account. More than 3x generation Z people have already taken up financial literacy classes than their millennial counterparts. While many of them have been financially stable, some may also have faced trouble related to college savings, getting a particular kind of job, renting an apartment, buying a home, and paying off debt after college life.

To take our discussion further, we should discuss some important factors that govern generation Z financial literacy and habits. Some of them are as follows:

• Money management skills:

Most people in Generation Z are financially literate, but some of them are also dependent on their parents or relatives for financial help or information. This is basically challenging since most parents have grown up in different financial situations. They are less literate regarding mortgages, loans, savings, and retirement. They often fail to understand the different options available in the market as a whole.

Since the recent shift towards self-service, automation, and the constant availability of applications, including preapproval of mortgages and loans, situations have changed drastically, even 10 years ago. At the same time, many banks don’t offer in-depth support for pension professionals investing for the benefit of retirement and 401K, meaning that generation Z solely has to depend on themselves for any kind of financial decision. Thus, the basic financial literacy program will offer a better foundation for generation Z, helping them to make correct financial decisions without any worries.

 

• Debt is very bad.

Generation Z people are absolutely hesitant to opt for any kind of financial debt. Generation Z also needs to build credit and take on small and manageable debts in order to be able to take out mortgages and loans for larger financial decisions later in life. People in generation Z need to understand financial terminology like smart debt management skills and how to avoid taking on any kind of debt. This, in turn, will help them manage their financial resources efficiently. These young people should be made well aware of their credit history and why they shouldn’t opt for loans if it is not at all necessary. They should be provided with effective training on credit reports, and scoring is one way to combat all this.

These generation Z people are digital natives who grew up with apps and calculators for almost anything. While a certain level of awareness and self-sufficiency is good in many ways, it is of absolute necessity that one seek out help and personalized assistance. Talking about financial assistance can result in improved and more personalized loans, bank accounts, and other options that may be available to drive engagement and increase engagement with banks. It will help generation Z finances to differentiate between when self-service is the best option to avail.