Introduction to Financial Preparedness in Younger Generations
Following the Covid-19 pandemic, advancements in technology such as cryptocurrencies, Fintech growth, Artificial Intelligence (AI), geopolitical tensions like the crisis between Ukraine and Russia as well as other world events, the global economy greatly evolved, leading to a change in how money was perceived and handled especially by the Millennials (1981-1966) and Gen Z (1997 – 2012).
Millennials and Gen Zs have experienced a number of economic challenges that has led to them taking on future-ready finances by adopting strategies and mindsets that prepare them to effectively navigate the constantly changing economy to ensure stability.
Unique Financial Challenges Faced by Millennials and Gen-Z
Some of the unique financial challenges faced by Millennials and Gen-Zs includes:
● Rising cost of living
● Long-term debts
● Unemployment/Job insecurity
● Lack of financial literacy
● High accommodation costs
● Economic instability
● High healthcare cost
However, these financial challenges also come with certain opportunities that can improve the financial problems of Millennials and Gen-Zs. Some of which include embracing technological advancements, financial education, leveraging the gig/freelance economy and seeking newer investment opportunities etc as avenues to build a strong financial foundation for the future and secure multiple income streams.
1. Financial Education
Millennials and Gen Zs are increasingly aware of the importance of financial literacy, which covers budgeting, saving, investing, financial planning, and tax literacy. Many educate themselves through online courses on platforms like Coursera, edX, and Khan Academy. Educational institutions also include financial literacy in their curricula, offering workshops and seminars for practical advice and real-life simulations.
2. Adoption of Digital Tools and Fintech Solutions
This growth in digital banking and fintech has proven to be beneficial for tech savvy younger generations with many of them engaging in side hustles and freelance jobs due to the unstable nature of the economy and job insecurity. This has led to an expansion in their job search with individuals not being limited to their home countries but also bagging gigs from foreign companies and getting paid in foreign currencies.
Some of the reasons why adopting fintech solutions and digital banking by millennials and Gen-Z has been seamless includes:
● Convenience and accessibility: Digital banking platforms run for 24-hours and do not have time restrictions like traditional banks. Users are able to access their funds from any location at any time. Signing up on these digital platforms is also less cumbersome and less time consuming, eliminating the need for paperwork.
