Why Gen Z Approaches Money Differently Than Previous Generations

Photo: Pressmaster / Shutterstock
man and woman talking

By Megan Glosson

The aftermath of the pandemic has left many people desperate for employment opportunities and wealth.

Yet, despite the steady increase of people living in poverty over the past two years, nearly three-quarters of Gen Zers think they’ll be wealthy one day.

RELATED: 5 Things You Can't Spend Enough Money On (Because Material Items Aren't Everything)

So what’s their secret?

Well, it’s all in how Gen Z approaches finances, both in terms of investments and earnings.

Gen Z invests their money differently.

One of the biggest differences between Gen Z and previous generations comes into play with how they utilize and store their money.

Instead of building a savings account or setting aside money for a retirement nest egg, Gen Zers are focused on investing their money in ways that provide immediate gains.

For example, most Generation Xers and even older Millennials see owning their own home as a way to invest their money. Yet, most Gen Zers are utilizing real estate to build wealth in other ways.

This includes investing in rental property as well as newer concepts, such as fractional real estate investing and real estate investment trusts, which allow you to invest what you can directly into properties or companies profiting off of the real estate boom.

Furthermore, Gen Z is highly enthusiastic about investing, but for the sake of retirement alone. Instead, over half of all Gen Zers have funds invested in some sort of venture.

These investments vary between mutual funds, exchange-traded funds (ETFs), cryptocurrencies, and non-fungible tokens (NFTs). This holds true regardless of income status and gender identity.

It’s likely that these dramatic shifts in investments are at least somewhat contributing to Gen Z’s general outlook on their future wealth. They can see the future return on their current choices in where to place their money.

RELATED: Can Money Buy Happiness? Research Says Yes — If You Spend It On These Things

Gen Z makes money differently, too.

When Baby Boomers entered the workforce, they went in with the mindset of working their way up the career ladder and eventually being rewarded for their loyalty to a single company.

However, that mindset almost never works in our modern world. So, Gen Z has recognized this and adapted.

Unlike Millennials, who sought out careers in business and related fields, many Gen Zers aspire to work in fields related to healthcare, education, or the arts. Gen Zers aren’t as scared of things like student loans, which opens the door for opportunities requiring more time in school.

This upfront investment will eventually pay off, and that’s what Gen Zers are banking on.

Also, Gen Zers are by far the most active members of the modern gig economy. In fact, most Gen Z individuals who aren’t in college participate in freelance work or take up contract work instead of seeking out full-time, salaried employment options.

What’s more, many of them seek out alternate sources of income through social media and other online options.

Gen Z has definitely entered adulthood with a splash... but not in the way most people imply. In many ways, Gen Z is poised to be one of the wealthiest generations to date.

So, maybe it’s time we look at what they’re doing to earn and invest their money and take a play from their book for once. Who knows, it just might offer some hefty returns.

RELATED: How Millennials Are Missing Out On Millions Of Dollars

Megan Glosson is a mother, freelance writer and editor based in Nashville, Tennessee. She enjoys writing on a variety of topics, but loves taking on anything with a personal connection to her own life. Her work has been featured on The Mighty, Project Wednesday, Thought Catalog, and MSN.

Sign up for YourTango's free newsletter!

This article was originally published at Unwritten. Reprinted with permission from the author.