Uziel Gomez, 26, can be associated with his Gen Z client, who is navigating adults and personal funds for the first time.
Gomez, founder of financial planning firm Primeros Financial, said young people faced a variety of financial challenges early in their lives and careers, including the Covid-19 pandemic, rapid cost-of-living and rapid tuition fees. It's no secret. Some of his Gen Z clients ask him how to help their parents financially. Looking forward to the future, Gomez knows he will face similar predicaments.
“We have some clients. They're a full retirement plan for our parents,” he says. “For example, I'd like to plan my father's retirement.”
This is just one of many scenarios that Gen Z-ers are looking to navigate. Young people are also wondering how to save sabbaticals before retirement, have ample emergency funds, and how to identify facts from fiction when evaluating money management tips from social media.
I spoke to three young financial planners about the advice that ZZ gives to Gen Z when mapping financial futures.
We will come up with financial goals that reflect your values
Of course, some of the advice targeted at Gen Z reflects that of its predecessors.
When young clients come to Naimabush, the financial guide for a fruitful company, she gets a company match whether she is building emergency savings, paying off credit cards and other high profit obligations. Ask if there is. Their Retirement Savings Account – 3 Permanently Important Priorities.
One of the main tasks Bush supports is for clients to go outside and escape high profits. While many Gen Z-ers want to avoid undertaking student loan debt, she says it's very easy to accumulate debt in other ways, such as buying now.
Beyond that, Bush encourages Gen Z clients to work together on the broader financial goals and question where those aspirations came from. What she brooches in conversation is a dream of home ownership that has become out of reach for many young buyers.
“Buying a house is a huge decision [I ask] Is this something you really want to do? “Learn something else that aligns with your values.” Some clients want to maintain their current lifestyle, while others want to live abroad for a while, says Bush. 33) explains. Meanwhile, her entrepreneurial clients are seeking her help by mapping how to drive business and side hustles off the ground.
Rethinking career and retirement
Many ZERS receive retirement benefits through work, but the concept of retirement would look very different to them. Nate Hoskin, founder and lead advisor at Hoskin Capital, says relying on the social security system and traditional pensions no longer feels like a safe option for younger clients.
In response to that uncertainty, Hoskin, 26, says his client is working hard now to achieve better stability in the future. That could mean working on weekends or long hours, throttle jobs you're studying for a degree, or delaying milestones like buying a home, he explains. Hoskin also offers predictions about how much money you need to save to maintain retirement without Social Security, making one of those payments a great bonus, he says.
Unlike many baby boomers, Z-Ers has remained loyal to one company for decades and doesn't expect to retire on pensions. As a result, generations tend to hop hop until they find more rewarding roles or find their passion and better roles, Bush says.
Working with clients who earn a variety of income, Bush says the key to building the life you want is to create a savings habit, even if it's $5 or $10 per month. I say it. And don't increase your spending significantly as your income increases.
“Instead, you need to focus on saving more for you in the future,” Bush says.
Beware of flashy financial advice on social media
One of the issues inherent to Gen Z is the firefighting of financial advice exposed through social media. Listening to other people's experiences on Tiktok and Instagram can be helpful and sometimes empowering, but some of the advice there is totally misleading, says Gomez.
Some of the bad advice he had to deny is that it's better to be an entrepreneur than having a traditional 9-to-5 to build wealth, and spending plans (meaning budgets) ) is what limits you, says Gomez.
Bush says that Gen Z's social media wiseness helps them find useful tips, but sometimes they overwhelm them with information that doesn't fit their situation. “This can lead to decision overload or decision fatigue and information overload,” Bush says
“Investing should be boring,” Gomez says.
The Gen Z flood is not only difficult to find good advice as it is being consumed via social media. They also make themselves compare to others. Gomez says he had to advise his clients through FOMO, watching others make their money moves.
For example, a few years ago I was interested in investing in cryptocurrencies and individual stocks that would make it “on the moon.” “Investing must be boring,” he says.
He also had to ask questions about the construction of passive income investment, a frequent subject of social media hustle enthusiasts.
“Many people are trying to find a lot of rich people or get the wealthy and simple information available online,” says Gomez. “Really, it's about honing and controlling what you have control, really focusing on your career, saving and investing what you can.”
Many young people are already thinking about how they want to support their parents financially in the future. Gomez advises families to determine how realistic they can provide, whether it is a monthly or a one-off emergency. They also need to consider trade-offs between these arrangements, Gomez said. Does that affect their lifestyle? Does that affect other goals, such as home savings, retirement, and other priorities?
It is also important to establish boundaries. In addition to knowing how much support they can provide, Gomez said that whether financial support is strict for essentials such as housing, medical expenses, food, or travel. , we recommend that you clarify whether it can be used for discretionary expenses such as meals, meals, etc. Or entertainment.
One thing that Gen Z-ers seem to be revealing is that they want to spend their money and embark on a new experience. Some people plan to move abroad for several months at a time, Bush said. Others want to make sure they are paying to make meaningful memories that look like they can see Beyoncé at concerts.
Still, Hoskin discovered that even his high-earning Gen Z clients are cautious about money. They pour much of their income into emergency funds, health savings accounts and retirement accounts, and even discretionary spending is wise.
For those who have a healthy income and are worried about the cost of spending $300 on vacation or going home to visit their parents, Hoskin encourages them to go. That hesitation, he says, is likely due to the Z-ers entering a volatile economy and developing a survival mindset. They are worried that if they let go of their money it won't be restocked in the future, he adds. Realizing a similar pattern among clients, Gomez often spends when Gen Z clients who built wealth in their families feel they should save their future or save their parents instead. He added that he feels guilty.
“Money isn't just about numbers and optimization,” says Hoskin. “The overall goal, the reason you worked so hard and got into this job is to make sure you do that and achieve all your goals.”
