The following is a Guest Post by Beau Peters
When you think of managing your bills, you may have an image of someone sitting at their kitchen table holding their head over a stack of envelopes and spreadsheets. While baby boomers and millennials will have lived through that reality, Gen Z is bringing an entirely new viewpoint to managing finances. As technological natives, this new generation is demanding a new level of accessibility and freedom to financial management.
Though a large portion of the population still uses a pen and paper as their main form of budgeting and tracking, there are more options available now for banking, saving, and investing. From micro-investing to stocks and trading, even the stock market has been inundated with the future of financial management. Today, apps that interface with your bank accounts, recommend budgets and ways to save money, and that allow you to build a budget around your income are now the norm.
From industries that they support to how they communicate, the most recent generation has had more access to technology and the internet than any other. They are responsible for changes in many industries, including finance. They are changing how we track, budget, and even invest.
How Are They Tracking and Budgeting?
While millennials have incurred a record amount of debt, Gen Z has influenced how we manage, track, and interact with our money. In the generation of bullet journaling, 43% of those who track their finances do so with a pen and paper. The rest prefer digital management and almost half of those have no desire to use or have a brick-and-mortar bank. This has led to the rise of budget tracking and bill pay apps.
Mint was one of the original bill pay apps that pioneered this movement. Though they have recently removed their popular bill pay function in favor of focusing on financial tracking, other platforms like Finovera have stepped up to fill the gap. As these apps have evolved they have gone from basic tracking to performing almost any function necessary for managing finances.
At this point, nearly every bank has its own app that allows you to pay bills, send money, and check your account. But the generation that has never experienced life without the internet has been instrumental in upping the fintech game. From simple budgets to daily financial tracking, to advanced investment operations, any aspect of financial management can be done from a phone or device.
What Are the Options?
Some apps focus on niches of finance such as specialized budget calculators, while others focus on micro and advanced investment. Apps like Robinhood are designed to provide free tools to buy, sell, and trade everything from big-name company stock to cryptocurrency. These apps focus on making the stock market accessible to a generation of technology natives that seek ease and immediate response. Other apps are catering to generations with less financial liquidity than earlier generations.
Acorns is a micro-investment app that takes the spare change from each transaction you make and puts it into investment and retirement portfolios and offers a specialized debit card. Other apps serve budgeting and tracking needings, by connecting with your bank account. Many of these apps such as You Need a Budget and Every Dollar work on a zero-based budget, where you have to plan each dollar you spend, and your bills and spending are considered equal to your income.
Banks have also gotten in on this demand for easy access to financial management. Companies like Chase Bank have developed their own budgeting software for customers, and many offer the ability to send a certain portion of your income each month to a savings account. The ease of access and ability to budget and manage on the go is the tool that Gen Z is wielding against traditional financing.
What is Forcing this Change?
Both millennials and Gen Z have faced a waning economy, a rise in inflation, and pressure to acquire advanced degrees immediately after high school. With rising tuition rates, Gen Z is having to use loans for higher education and manage large sums of money at a younger age. As technological natives, this new generation of adults is demanding the ability to access and manage their finances at a moment’s notice.
During the COVID pandemic, online banking, budgeting, and investment has become a necessity. With unemployment at an all-time high and only necessary businesses open in many places Gen Z is walking out of college and directly into an unwelcoming workforce, with extremely limited money. The need for advanced budgeting, bill management, and saving that is afforded by these apps has become a crucial part of their lives.
Millennials became known as the generation that forced corporate change by moving away from big chains and taking money out of established business industries. Gen Z, on the other hand, is beginning to be recognized for the technological innovation that their needs and demands are creating. As they influence everything from the increased use of cryptocurrency to the development of finance and investment apps, Gen Z is pushing the financial world forward, as digital natives who are savvier than ever.