Teen Life
Saving to Spend: Teens and Finance
Published Date: July 17, 2024
Today’s teens (Gen Z) know they need money in the future, and many worry about their financial stability. However, when it comes to money management , they can be a bit impulsive.
Most teens report managing their money, with two-thirds saving money in savings accounts. However, fewer are budgeting, tracking spending, or learning about essential teen financial literacy topics like taxes and funding higher education.
Most teens report managing their money, with two-thirds saving money in savings accounts. However, fewer are budgeting, tracking spending, or learning about essential teen financial literacy topics like taxes and funding higher education.
When examining why teens are saving money, a short-term focus emerges. The most common reason is simply to have savings, though only 40% of teens gave this response.
Understanding what Gen Z spends their money on reveals a preference for immediate gratification. Common savings goals include education, hobbies, cars, clothing, beauty products, gaming, travel, and entertainment. Gen Z investing and saving for housing are less frequent priorities.
Despite this, teens express interest in improving their long-term financial knowledge. Half admit worrying about their future financial stability—a significant concern given their experience with economic instability during the COVID-19 pandemic and subsequent economic challenges. This generation lacks the financial optimism of previous generations.
These concerns present a key opportunity to boost teen financial literacy and encourage positive financial habits. While teens and finance may seem like an odd couple, their existing saving habits offer a starting point. By linking saving to long-term goals, organizations can help teens transition from simply saving money to saving with a purpose.
Engaging teens requires interactive methods. Gamification, simulations involving hobbies, and challenges tied to personal goals (like education and career) can make learning about finance more appealing. This approach can cultivate a generation that not only saves, but saves purposefully, transforming current Gen Z spending habits into financially responsible behaviors.
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