Six Money Habits Gen Z Wishes You'd Teach Them

Gen Z money habits are a thing of intrigue for many credit union and community bank marketers. So let's take a closer look.

First, a picture. That frumpy kid you saw on your way to work this morning who’s staring at his phone waiting for the school bus? He may look like an angsty teenager, but he’s actually the future of your credit union or community bank.

He and his more than 90 million peers—anyone currently 20 years old or younger—are Generation Z.

You know Gen Z (they’re starting to be talked and written about even more than Millennials) but are you doing something about what you know? What Gen Z money habits are actually informing your marketing, your operations and your strategy?

Here are some stats about Gen Z money habits that should light a fire under any credit union or community bank marketer:

• This year, Gen Z is predicted to make up 40% of the entire U.S. consumer base
• More than 40% of Gen Z are already working full-time, part-time or freelance
• A quarter of Gen Z has an iPhone by the time they’re 10 years old
• Gen Z has $44 billion in buying power, $600 billion when factoring in their influence over their parents
• Bank of America already has a relationship with one in five Gen Zers

[bctt tweet="The reality is, Gen Z wants a banking relationship with you. They need you and they know it, but they don't necessarily see you as any different than what's already out there. #genz #generationalmarketing" username="jmarkarnold"]

A key way to differentiate yourself from the dozens of fintech companies and mobile-only banking solutions vying for the Gen Z market is to provide financial education.

Specifically, here are six money habits Gen Z wishes you’d teach them:

1. Finances are fun

Gen Z thrives on creative experience. Show Gen Z that managing their finances can be fun. Zogo has capitalized on this aspect of Gen Z and created a gamified app that teaches kids (and adults too) the basics of financial management, what a credit union is, etc. Not surprisingly, the app’s creators are Gen Zers themselves, undergraduate students at Duke University.

Marketing Tip: Provide an interactive financial education tool for younger members. If you don’t have the bandwidth to create something like that in-house, partner with a company such as Zogo to help.

2. Your money is about more than just you

Like their Millennial predecessors, Gen Z is a social cause-driven generation. What’s more, they long to be part of a community. Teach Gen Z how their money choices—like where they bank—impact their local communities and society at large.

Marketing Tip: Offer weekly screenings of “It’s a Wonderful Life” to teach Gen Z the benefits of cooperative finance as opposed to big-bank convenience. Just kidding…kind of. The point is to use visuals like infographics, videos and testimonials to educate Gen Z on the power of cooperative finance.

3. Money is not bad

Gen Z is the most stressed out generation in our nation’s history. Four in five say money is one of their biggest stressors. They worry about finances constantly, and many are already planning for retirement. The key to telling Generation Z that money isn’t bad is to not invalidate their concerns. Don’t simply say “don’t worry.” Instead, come alongside them.

Marketing Tip: Put a positive spin on your marketing to Gen Z. That might seem obvious, but going out of your way to create positive emotions in Gen Z when they think of your credit union or community bank will pay huge dividends.

4. Collectors don’t give warnings

As much as Gen Z is conscious of money and finances, they still (like many of us) can find themselves at a point of accidental financial distress. For example, many don’t understand that credit cards are the same things as borrowing money from someone and having to pay them back. Here are basic financial knowledge points that Gen Z is lacking:

• Only 29% know that closing credit cards could hurt your credit score
• Four in 10 don’t know that a late payment sent to a collections agency could stay on your credit report for six years or more even after it’s paid
• Only 14% know you should have six to 12 months of emergency funds in savings

Marketing Tip: Invest in reminder technology that will proactively remind members about upcoming payments due and potential charges. The more you engage with Gen Z (for example, giving them a warning about potential overdrafts) the more loyal they will be to you.

5. Basic product education

Gen Z is smart. They’re shaping up to be the most educated generation in history (59% of Gen Z ages 18-20 are currently in college). By the time you get to them, they will likely already know about checking accounts and savings accounts. And yet, they’re still hungry to learn more about finance.

Marketing Tip: Put “you may also be interested in” and “did you know” sections on your website or pop-up blurbs in online banking to drive Gen Z consumers to other products and services that will benefit them. Check out how the credit union for the United Nations (UNFCU) does a fantastic job with this.

6. You have options for personal finance

Yes, Gen Z wants to be part of a community. Yes, many are social butterflies participating in one cause after another. But at the end of the day, they are also individuals who want to express themselves—even when it comes to their finances. They like options and like knowing they’re in the driver’s seat.

Marketing Tip: Have a quiz on your website that assesses the financial goals of your member and then gives them next steps accordingly.

As you consider these different ways to reach Gen Z, think of this generation like a baby bird eating out of a mama bird’s hand. They want independence, yes, but they also understand that you are their means to that independence. Gen Z's money habits will be formed by you. You can't afford to do nothing about it.