Does Gen Z think differently about money? According to a new global study, they’re not going to conform to old “life milestones” no longer relevant to them, or define success by their bank accounts. So how do younger people feel about their finances, and is there anything the rest of us can learn from them?
Today’s young adults – Gen Z and younger millennials aged between 18 and 34 – are discarding the traditional playbook, according to the new research from EY. The traditional markers of progress – a stable job, home ownership and the steady accumulation of wealth towards retirement – just aren’t possible for many born from the 1990s to 2007, according to the report, titled Adulthood Reimagined for a Changing World.
But doing things like their parents, or even older siblings, is not what many young people want either. They are customising their journey.
The ‘global generation’
Those born 1991 to 2007 are the first “global generation”, according to the EY report. Published in May, it surveyed more than 10,000 people in this age group across 10 countries.
They grew up using technology, with information at their fingertips. This has given them a real-time exposure to a global culture, according to the EY study.
Some 94 per cent of Gen Z and younger millennials spend time on social media every day. Some 44 per cent of them would even prefer to spend less time on it, according to the study.
They aren’t all watching the same TikToks or Instagram reels at the same time, but sometimes they are – the 2024 satirical TikTok post, “I’m looking for a man in finance (with a trust fund, 6′5″, blue eyes)” was watched more than 26 million times within three weeks of being posted by its Gen Z creator, 28-year-old New Yorker Megan Boni.
Crossing language barriers and cultures, a post like this can create global connectedness.
[ Gen Z is leading the charge back to the officeOpens in new window ]
The “global generation” is looking to socials for answers too – including answers to how to “do” life and money.
From the lives of stay-at-home “trad wives” who have tens of millions of Z followers, to proponents of “financial independence, retire early” (Fire) and the “cryptobro” cryptocurrency influencers, through their phones, Gen Z has been exposed to a much wider range of influences from people their own age than any generation before them.
“I find that Gen Z are actually a bit more financially literate,” says David Looney of Cork-based Alpha Wealth.
“They can be a bit more financially aware than older generations too. They are certainly more open about investing,” says Looney. And he doesn’t just mean crypto.
“Previous generations saved in the credit union, not realising the impact inflation had on their money. The younger generation is a lot more open to investing, either online, through a broker or in a pension contribution.
[ Gen Z will become the propulsive force that drives Irish societyOpens in new window ]
“They are more willing to reach out and get professional advice too.”
They are also more open to tech and AI-enabled financial advice, with 41 per cent of Gen Z and millennials reporting they would allow an AI assistant to manage their investments, according to World Economic Forum research published in March.
Changed world
Leave school, maybe get a degree, get engaged, get married, buy a house, have kids, climb the ladder, retire, shuffle off the mortal coil – these waymarkers, and the points at which their parents hit them, are simply not relevant to Gen Z and younger millennials.
In Ireland, for example, this younger group is coming of age in a very changed world to their parents. For starters, more of today’s young people have spent time as students before starting their careers.
Some 65 per cent of 25-34 year olds in the State hold a third-level qualification. This compares to just 38 per cent of 60-64-year-olds, according to CSO figures.
Marrying as a milestone is not happening as much and, where it does, is happening years later too. In 1991, the average age for brides was 26.9 years, according to the CSO; for grooms it was 28.7. Last year, that had risen to almost 36 for brides in opposite-sex couples and almost 38 for grooms.
For same-sex couples, it was older again.
Indeed, relationships and children are increasingly viewed by younger people as “choices rather than obligations”, according to the EY study. This is allowing individuals to prioritise their own values and self-driven aspirations.
Lifespans have lengthened too. Between 1991 and 2022, life expectancy in the State at birth increased by 7.9 years for men and six years for women, according to CSO figures.
New timelines like these are “changing the fundamentals of human life”, according to the EY study.
But the idea that Gen Z and younger millennials are simply postponing adulthood is outdated, according to the report’s authors. Instead, this is the “pragmatic generation”, approaching life milestones “not with rebellion but with reasoned scepticism”, according to the EY study.
Young adults are transforming adulthood from “a predetermined sequence into a customisable journey”, it says.
The old early adulthood script is being rewritten by a generation asking not “When should I?” but “Why should I?”
Unlike their parents, Gen Z and younger millennials don’t see job-hopping as a faux pas on their CV.
“Past generations were quite happy to have stable employment when they were younger, because they had responsibilities younger so there was a perceived risk to moving,” says Looney.
About 60 per cent of young adults globally now believe they should work for two to five organisations throughout their lives, while 19 per cent believe they should work at six or more.
Health as wealth
Young adults are prioritising their physical and mental health and relationships with family over wealth and career advancement, the EY study says.
Some 51 per cent of young people globally rate their mental and physical health as the primary measure of future success, the number one metric globally. Family relationships follow closely at 45 per cent, outranking both wealth (42 per cent) and occupation (41 per cent).
“This is a wake-up call for societies that have long equated success with financial gain, material possessions and personal sacrifice,” according to the study. Governments that prioritise economic growth at all costs, be warned.
That’s not to say that younger people aren’t deeply concerned about finances – they are. But, they want more than just a paycheck, say the EY researchers.
They want employers who align with their values (69 per cent) and seek employers who respect their personal time (61 per cent), according to the study.
This is about more than “work-life balance”. Young adults seek careers and jobs that support stable lives, rather than lives that revolve around their careers, according to researchers. That might account for their rising interest in government jobs.
Home ownership
Financial security serves as a foundation for a fulfilling life – but it’s not the ultimate goal, according to the study. This doesn’t mean Gen Z and younger millennials aren’t disinterested, or unworried when it comes to money. Financial security is very important to them.
Some 87 per cent of young adults consider financial independence very, or extremely important, according to the EY study.
The authors describe this “moment of global convergence around financial security” as “striking”. More than half of the countries surveyed (Brazil, Saudi Arabia, South Africa, India and China) rated this importance above 90 per cent.
Sweden was the exception at 58 per cent, potentially due to its robust education, welfare and social systems.
Yet young people in many countries are grappling with the gap between their desire for financial independence and the economic realities that make it increasingly difficult to achieve, according to the study.
Buying a home when your parents did? That’s just not on the cards for many younger people.
In the Republic in 1991, the age at which two-thirds of householders owned their homes (with or without a loan) was 28 years. That had risen to age 44 in 2022, according to CSO figures.
Today, some 86 per cent of 25 year olds living in the State are “very concerned” about access to housing, according to Growing Up in Ireland data published by the CSO this year.
Just 3.8 per cent of those born in 1998 owned their own home at the age of 25, according to those surveyed. Almost seven in 10 are still living at home with their parents, with most saying this is due to financial reasons.
Of those who were not homeowners, 80.5 per cent expected to buy a home in the future.
Two-thirds of 25-year-olds save regularly according to the Growing up in Ireland data.
“Young people put a big emphasis on financial planning and trying to reach financial independence,” says Alpha Wealth’s Looney. “They have access to all the information and technology to achieve it too,”
Some 30 per cent of Gen Z began investing in university or early adulthood, compared to 15 per cent of millennials, just 9 per cent of Gen X and 6 per cent of Baby Boomers, according to the World Economic Forum research.
With average house prices in the State now more than seven times the average wage, young people are looking beyond job income to generate wealth.
In a world of economic challenges, geopolitical tensions and rapid technological change, young people are split between optimism and pessimism about the future, according to the EY study.
While 31 per cent worldwide are very or extremely excited about their future lives at 50, slightly more – 34 per cent – harbour deep fears.
Optimism is closely linked with opportunity and a desire to make the world a better place, according to the research, while pessimism correlates with distrust, apathy and risk aversion.
A younger generation so split could have political and economic implications for everyone. But their rejection of traditional milestones may be little more than economic pragmatism, says the study: “Why strive for a future that feels financially unfeasible?”
