How Your Credit Union Can Help Alleviate Gen Z’s Financial Anxiety

Sponsored by Zogo

While financial anxiety is nothing new to many older generations, the type of financial anxiety weighing on Gen Z is uniquely problematic—not only for the people suffering the anxiety but for the general population, as well.

Here’s the thing: Within a short period, Gen Z will be the most financially powerful generation. By 2030, they’re expected to represent 30% of the U.S. workforce and 27% of total global income.

But this seemingly promising future is feeling more and more out of reach for Gen Z, likely exacerbated by the emotional and economic whiplash of the pandemic. In early 2020, the oldest of Gen Z were poised to inherit a booming economy as they prepared to graduate from college and enter the workforce. Unfortunately, COVID-19 turned that dreamy future on its head, leaving soon-to-be graduates scrambling to figure out digital learning, virtual job hunting and an increasingly problematic set of economic circumstances.

According to a survey published by Maddyness, 74% of Gen Zers are stressed about money management and, alarmingly, 50% say they generally avoid checking their bank accounts due to financial anxiety.

Some subsections of Gen Z experience more financial stress than others. Strikingly, 82% of 18- to 24-year-old women in this age group report that managing their finances causes major stress. That’s 8% higher than the average amount of Gen Zers who report stress around the same topic!

One of the main reasons for this discrepancy is that boys and men are often afforded more financial education opportunities than girls and women. There is also a wide gap between white and minority levels of financial literacy, which directly correlates with the prevalent and disparaging socioeconomic gap between those groups. While it’s hard to admit that such divides are still happening in 2022, it’s unfortunately all too true and needs to be addressed.

What’s Causing These High Levels of Financial Stress?

The recent state of the world certainly isn’t wholly to blame for those alarming financial anxiety stats. The way that Gen Z has learned financial literacy (or rather, not learned it) is at the root of the issue. A recent Go Banking Rates survey of 1,000 18- to 24-year-old Gen Zers highlights this issue, reporting that a measly 17.6% said they learned financial education in school classes. On top of that, the few students that do receive financial education in schools typically report the lessons to be boring and easily forgettable.

Conversely, 48% of Gen Zers reported learning about personal finance from social media, specifically TikTok and YouTube. While it’s fantastic that Gen Z is actively seeking financial education, it’s troubling that so many are essentially forced to turn to often unverified information on social media channels. While some of that information may be reliable and beneficial, without proper verification, users may not know if they’re getting adequate education or misinformation, which can have devastating consequences. Low or inadequate financial literacy is directly linked to high financial anxiety, and all too many Gen Zers find themselves in that exact position.

At this point, one thing is very clear: Gen Z has the lowest levels of financial literacy and the highest levels of financial anxiety. Whether from a lack of information in school or from skewed sources online, this increasingly autonomous generation is not set up for financial success. Over the years, it’s become increasingly clear that Gen Z actually craves financial education, they just often don’t know how to obtain it.

What Credit Unions Can Do

Credit unions have the opportunity to fulfill this need and, in doing so, alleviate financial stress. Interested in how your credit union can connect with Gen Z to bridge this gap? Some of the best ways to reach Gen Z, and potentially gain their membership and trust, are to:

1. Prioritize education. Gen Z seeks institutions that make them feel empowered, equipped, and educated, which is the perfect reason to partner with Zogo’s financial literacy platform. Together, we can equip this generation (and future generations) with education and financial wellness tools, empowering them to make informed financial choices that reflect their unique needs and desires.
2. Stay in touch. Constant communication benefits both your institution and your younger members by ensuring you stay up-to-date on their needs. Since Gen Z is experiencing so much financial anxiety, it’s essential to provide digital support and tools for managing those feelings and guiding them toward attainable solutions.

While addressing financial anxiety wasn’t Zogo’s original goal, it’s become clear that alleviating stress is directly linked to our endeavor of making financial education accessible, fun and rewarding. Gen Z does crave financial education, often because of their building financial anxiety as they take on more in young adult life. Rather than adding to their already-full plates, meet them where they are: on their phones! By digitizing and gamifying financial literacy, we make it easy for people to tackle their financial anxiety one bite-sized module at a time. Your credit union can do this too.

Zephyr Jaeger recently joined the growing marketing team at Zogo as a marketing content writer, a role in which she provides B2B-centric content to publications and works closely with her co-workers on expanding the marketing presence. In her free time, she enjoys being by the water, finding the best breweries in Austin and cuddling with her puppy. Visit our website to see how our solution fits your organization and to schedule a demo to learn more from one of our committed onboarding specialists.