3 Financial mistakes Gen-Z’s are making
There is quite a lot of hush-hush about Gen-Zs in terms of mindsets, behavioural patterns, values, attitudes to work, and of course our finance.
Anyways this article is not about that, but more about some of the financial mistakes my fellow Gen-Zs make that we shouldn’t be making and how we can do better. So if you are a Gen-Z like me, you should read this article to the very end.
In general, each generation has its unique style of doing things. The financial habits of Generation Z have been very different from those of baby boomers in the past.
Financial mistakes of Gen Zs
Most Gen-Zs seem to be more aware of their finance and are more frugal. But there are still some financial mistakes we make. They include:
1. Keeping up with the Joneses on Instagram
With the surge of digital media, it has become easier to keep up with the lives of your colleagues, your friends, and people that are way older than you. This usually results in Fear of Missing Out (FOMO) and unnecessary comparisons. If this is not cautioned, it could lead to one making terrible financial decisions.
When it comes to rejecting materialism, Generation Z appears to be following in the footsteps of millennials, but that doesn’t mean they aren’t still attempting to keep up with the Joneses. Nemorin explains, “In the past, [it] meant a huge home and a big automobile.” This time, experiences are more important.
Young adults and older teenagers could look at the world through the prism of their social media feeds. They can wind up spending more money than they intended to in their effort to chronicle their amazing dinner or Instagram their most recent excursion.
Gen Zs should make sure they have a documented budget for typical spending, including meals and travel, before getting caught up in impressing their peers on social media.
2. Thinking you are too young to invest
There is never a bad time to start saving and investing for the future. Actually, since you have a wider time horizon to deal with, the earlier you start investing, the bigger the funds you may amass.
Millennials tend to be more cautious when it comes to investing than their elder Gen X and Baby Boomer peers, despite being the more technologically adept and sophisticated age group.
We don’t fully understand why, but it may be because they are the generation that has to cope with the biggest social wealth difference in decades. Consider that they are the age group that saw the biggest market crisis in decades during their formative years.
However, Gen Zers shouldn’t commit the same errors. Technology has made investment more widely available, practical, and inexpensive than ever before. There are so many fintech apps that have made investing easier and simpler from the comfort of our homes.
3. Not having a balanced investment portfolio
Investing in trends like cryptocurrency without adopting “financial discipline”
“If you’re still going all-in on cryptocurrencies, you’re definitely doomed and a gambling junkie, in my opinion. Just give it some time, “Sethi of Insider advises.
Sethi advises keeping your cryptocurrency investments to 1% to 5% of your overall investment portfolio and keeping the majority of your assets in safer investments like index funds or bonds if you still want to invest in cryptocurrency in spite of the horror stories of people losing their entire life savings.
It is never too late to make the right financial decisions so if you have been making any of these mistakes in the past, you can correct them, do better and pave your path to financial freedom.