Recently, I was teaching my mom about Gen Z words while waiting around at the doctor’s office. We were laughing about the meaning behind slang. She would guess what the word meant before looking it up on Urban Dictionary and we would laugh when I revealed how to properly use it in a sentence. Let’s just say that “get lit” doesn’t have to mean getting high, but rather getting excited or literate.

One type of literacy I have increasingly thought about this past year is financial literacy. This past spring, I had the opportunity to compete as a middle schooler against high schoolers in the National Personal Finance Challenge (NPFC), an exam testing concepts of credit, investing, insurance, and taxation. Studying for and taking the test got me thinking about how financially literate my generation is: as a 13-year-old, I scored much higher than the average score of 50% for an NPFC competitor - never mind the average high school student.

When I talked to my school about starting a financial literacy club, the administrators were excited and supportive, but they suggested that we should start with a more exciting activity like the Stock Market Game to get the students hooked. Why did my classmates need to be enticed by a game when I had been interested in finance since my weekly visits to the farmers market as a toddler?

As it turns out, Gen Z scores the worst on financial literacy measures compared to previous generations. In fact, according to the Federal Reserve Bank of St. Louis, Gen Z has 13% more debt than millennials. Just as concerning, the 2021 Survey of Household Economics and Decisionmaking found that “only 15% of college graduate Gen Zers said the costs of college were greater than the benefits.” Clearly, they are feeling the pressure that outrageous college debt has on their post-college lives. The Biden Administration’s proposed student debt forgiveness plan provides relief to the older members of Gen Z, but it will not benefit any of us who have not even applied to college yet. To add insult to injury, according to a new report by Credit Karma, Gen Z’s credit card debt increased more than any other generation - taking more debt at a faster rate than older generations but also falling behind on payments. Even though Gen Z has been brought up with digital technology at our fingertips, younger Gen Z could tip the scale to an unsustainable level of debt, burdening the entire country with our financial illiteracy. 

While more states are introducing and passing bills to guarantee access to personal finance education in school, this education is still limited and inequitable across the country. Frankly, given that financial literacy is already low across every generation, financial education should be offered everywhere - not just in a semester-long high school class. I was inspired to create a blog, Financial Fitness, when I realized how uninterested and unprepared many of my peers were for their financial futures. Luckily, there are many up-and-coming financial literacy communities for teens and by teens that increase access to education and research opportunities in exciting topics ranging from investing to blockchain. 

Gen Z clearly lacks meaningful opportunities to learn personal finance and make good long-term financial decisions. People who care about the financial future of this country need to understand that Gen Z needs a different approach to learning personal finance aligned with their values. According to Roberta Katz, a senior research scholar at Stanford’s Center for Advanced Study in the Behavioral Sciences, the typical Gen Zer not only has a pragmatic attitude about solving societal issues but is “a self-driver who deeply cares about others, strives for a diverse community, is highly collaborative and social, values flexibility, relevance, authenticity, and non-hierarchical leadership.” Peer-to-peer education is one way to combat these disturbing new norms. Young adults are amassing hundreds of thousands of followers on platforms such as TikTok and Instagram by teaching financial literacy to one another and sharing resources. Interestingly, 84% of Gen Z that are worried about their finances rely on their family for financial information when those adults themselves are not sure how to advise given the ever-changing options for investing nowadays. Luckily, personal finance doesn’t have to be turned into a game to get Gen Z to care - we just have to see why we should get ‘fin lit’ and maybe help our parents out while we’re at it. 

Works Cited:

Bocetta, Sam. “How Gen Z Is Stepping Into Financial Independence.” Foundation for Economic Education, 22 May 2022, ttps://fee.org/articles/how-gen-z-is-stepping-into-financial-independence/. 

DeWitte, Melissa. “What to Know about Gen Z.” Stanford News, Stanford University, 3 Jan. 2022, news.stanford.edu/2022/01/03/know-gen-z/. 

El Issa, Erin. “Gen Z: How America’s Newest Adults are Doing Money.” NerdWallet, 4 March 2020, nerdwallet.com/article/finance/generation-z-money-survey.

Kato, Brooke. “Gen Z Is Finally Learning How to Budget with TikTok’s ‘Financial Cleanse.’” Nypost.com, New York Post, 3 Jan. 2023, nypost.com/2023/01/03/gen-z-is-finally-learning-how-to-budget-with-tiktoks-financial-cleanse/. 

Kent, Ana Hernandez, and Lowell R Ricketts. “How Does Gen Z Debt Compare to Millennials?” stlouisfed.org, Federal Reserve Bank of St. Louis, 25 Aug. 2022, stlouisfed.org/on-the-economy/2022/aug/how-does-gen-z-student-debt-compare-millennials. 

Perna, Mark C. “Why Financial Literacy Isn't Gen Z's Sweet Spot-Yet.” Forbes, Forbes Magazine, 12 Oct. 2022, forbes.com/sites/markcperna/2022/09/13/why-financial-literacy-isnt-gen-zs-sweet-spot-yet/?sh=586c469d627c.