Generation Z Gen Zers (born 1997-2012) represent the most significant generation in the United States with over 86 million. A substantial portion of consumers born in this generation prefer to use cash in person – 37% – according to Logica Research.
Aligning on money is all the more pressing for younger generations, who are earlier on in their relationships and careers—nearly half (49%) of Gen Zers view financial compatibility as more important than physical compatibility. That's compared to 40% of millennials, 35% of Gen Xers, and 30% of baby boomers.
Overall in 2021, Gen X (anyone born from 1965 to 1980) spent the most money of any U.S. generation, with an average annual expenditure of $83,357. The second biggest spenders are Millennials with an average annual expenditure of $69,061. Image: Visual Capitalist.
Gen Z (people born between 1997 and 2012) is turning to an old-school trick to save money – carrying cash. A whopping 69% of Gen Z is using cash more now than they did last year, according to a May 2023 Credit Karma report.
Not much has changed with Gen Z as they're currently clocked with 90% putting money towards entertainment monthly and a 2% increase in those spending over $300 each month. But if inflation is making everything more expensive, how are they affording this eventful lifestyle?
And while there are plenty of pitfalls and missteps that could plague young people along the way, Gen Z is shaping up to be the most financially savvy generation yet.
Over the past year, nearly three out of four (73%) Gen Zers say they've changed their spending habits due to increased prices. Their lifestyle changes have included cooking at home more frequently (43%) rather than dining out, spending less on clothes (40%) and limiting grocery purchases to the essentials (33%).
70 percent of Gen Zers using cash stuffing say they've been able to lower their monthly spend. In addition to more effective budget management, cash is also helping people to save. The survey shows 89 percent of Gen Z cash stuffers say they have been able to channel more money into savings.
In fact, most transactions are now cashless, and many people don't even carry cash on them — something that would have been unheard of 20 years ago. With Venmo, Cash App, Zelle and many more payment services out there, PayPal has become a favorite among millennials.
Americans have roughly $156 trillion in assets, according to Visual Capitalist, but half of that wealth — $78.1 trillion — belongs to the baby boomers. The rest is spread out across Generation X, the Silent Generation and Millennials.
For years, Millennials, now ages of 27 to 42, have lagged behind their Baby Boomer parents and Gen X counterparts in accumulating wealth. Most were raised in the economic idyll of the 1990s, one of the longest recorded economic expansions in US history.
As one of the most philanthropic generations, Baby Boomers have had a considerable impact on the charitable sector. Having lived through significant historical events, many Boomers feel a sense of responsibility to give back to society.
Self-made billionaires are most likely to be Gen X. Over 80% of billionaires are in this category, including Google co-founder Sergey Brin and Mu Rongjun, co-founder of Meituan, a company similar to Yelp. At the same time, the most billionaires living outside of the U.S. (81%) were born in this generation.
Born between 1997 and 2012, the 68 million members of Gen Z who make up 20.6 per cent of the US population are quietly shaping a new paradigm in generational giving. Gen Z is already proving to be one of the most generous generations, when measuring total annual giving as a percentage of disposable income.
Generational wealth refers to assets passed by one generation of a family to the next. In some cases assets are transferred after death in the form of an inheritance. In others they are passed to the next generation while the giver is still alive.
Many millionaires keep a lot of their money in cash or highly liquid cash equivalents. They establish an emergency account before ever starting to invest. Millionaires bank differently than the rest of us. Any bank accounts they have are handled by a private banker who probably also manages their wealth.
“Debit cards basically replaced checks,” Zywicki said. Yet, even in 2022, some Americans cling to cash. Older Americans still use cash for roughly one-quarter of purchases, according to Fed data. Low-income families, those earning less than $25,000 a year, rely on cash for more than one-third of their purchases.
Millennials are more likely to work in low-paying jobs and live with their parents, researchers found. But "those living more 'typical' middle-class lifestyles often have more wealth than their boomer parents did at the same age," the study, published in the American Journal of Sociology in September 2023, reported.
What is cash stuffing? A simple explanation for cash stuffing is allocating monthly budgets for certain expenses and putting the corresponding amounts of cash into envelopes. The idea behind cash stuffing is based on the accounting concept, 'zero-based allocation budgeting'.
Gen Z wants smart snippets of information. They are not going to tolerate some of the lengthy processes that banks have today, and the way most banks currently engage will not engage them. Engagement will have to become more intuitive.
Many Gen Zers have a full-time job and a side hustle, partly because they're wary of getting burned by their employers: 'They've seen it happen to their parents, to millennials' Forty percent of Gen Z have both a job and side hustle, according to a new report from EY.
Generation Z will soon surpass Millennials as the most populous generation on earth, with more than one-third of the world's population counting themselves as Gen Zers. In the US, Gen Z constitutes more than a quarter of the population and, by 2020, will be the most diverse generation in the nation's history.
