Gen Z feels pressure to spend, but doesn’t want to make money mistakes.

Generation Z, the first generation to grow up with social media, has a complicated relationship with money. While social media has become a source of financial education, it can sometimes exacerbate financial anxiety for Gen Zs. A survey by Deloitte¹, for example, found that 51% of them say social media makes them want to buy things they can’t afford.

A quick look at any social media profile popular with Gen Z — defined by Pew Research² as people born after 1996 — shows where this anxiety comes from. Popular social media influencers are often posting from exotic vacation destinations, wearing expensive clothing and snapping pics of their plates at high-end restaurants.

Combine this with the fact that Deloitte reports almost 20% of Gen Zs spend at least five hours a day on video social media platforms alone, and it’s easy to understand why many of them feel pressure to keep up with what they’re seeing.

Aaron Witherspoon, a financial planning analyst with Commerce Trust, recommends applying some healthy skepticism to online flashes of luxury. “While the things you see on social media may look amazing, they can also be an illusion,” he says. “Often people are going into debt, spending beyond their means, or are simply creating an image that isn’t real.”

Making matters even more complex is that many members of Gen Z are uncomfortable talking about money. A recent survey by Intuit³ found that Gen Zs would rather talk about sensitive topics like politics, parenting struggles or infertility than issues like debt, salaries or bad investments. In other words, they will often feel pressure to spend above their means but struggle with having conversations about their personal finances. It’s a challenging recipe.

Where Gen Z gets financial information.

On a more positive note, Gen Zs are seeking out financial information in a variety of places. A report from FINRA Investor Education Foundation (FINRA Foundation)⁴, found that Gen Z investors use a variety of resources to learn about investing and financial topics. The four most common sources of information were social media, internet searches, parents and family, and friends.

Given Gen Z’s deep connection to social media, it’s not surprising to see them turn to it for weighty topics related to personal finance. Forbes Advisor⁵ recently found that almost 80% of individuals in the millennial and Gen Z age groups have researched financial topics on social media. And they’re searching for smart topics, with the most popular being information about investing in stocks and bonds, personal budgeting, generating passive income, reducing debt and building or improving credit.

If the notion of turning to social media for financial advice makes you nervous, you may be pleasantly surprised to know that Gen Zs would agree with you. While it’s true that they seek out financial information online, they don’t always find it trustworthy. The FINRA Foundation study found that parents and family are actually the most trusted resources for learning about financial topics. Among Gen Z investors, social media is trusted far less — ranking behind financial professionals and companies, friends, universities and even financial apps.⁶

Witherspoon says it’s important to always ensure that any source of information is vetted. “While receiving information from friends and family or social media might help guide conversations about finances, you always have to be sure you’re learning from a trusted source,” he says. “It never hurts to do additional research to check the validity of financial advice before taking any action.”

Gen Z is looking for financial guidance.

Between all these different sources, Gen Z has access to a wide range of financial information, but it doesn’t always translate into decision-making. According to Intuit’s survey, two-thirds of Gen Zs say they know how to make a budget and track their income but haven’t done it. Nearly half of them have purchased cryptocurrency even though they admittedly don’t fully understand blockchain. Two-thirds of Gen Zs recognize the importance of investing but report that they don’t know how to do so. Perhaps as a result, two-thirds also say they’re not sure they’ll ever have enough money to retire.

All this information indicates that Gen Zs are concerned about their finances and they’re looking for help, but they can be uncertain about which information to trust. They’re also feeling pressure to keep up with the displays of wealth they see every day on their social media feeds and are worried about making bad financial decisions as a result. At the same time, they can find it difficult to talk about the money issues that often weigh on them.

Considering that many members of Gen Z consider family and friends to be a trustworthy resource, if you have a young adult in your family, it may help to proactively bring up finance with them. Even if you don’t consider yourself a financial expert, you could connect them with the resources that you trust and share guidance that has worked well for you. Even a friendly nudge in the right direction could help. Having conversations about money now can help make Gen Z’s financial future that much brighter.

If you are a member of Gen Z — or you simply feel like you can identify with feeling uncertain about finance — there’s plenty that you can do to build up your financial literacy. Talk to people you trust, whether it’s a family member, friend, or even a financial advisor.

If you feel embarrassed to admit you aren’t as informed about finance as you’d like to be, don’t be. As Witherspoon notes, you’re in great company. “When it comes to finances, we all would like to improve,” he says. “Start small and build from there. Getting disciplined about budgeting is a great first step. Knowing what money you have and where it’s going is extremely helpful. You just have to stick to a plan once it’s been created. Take the time to sit down, build a financial roadmap, and follow it.”

Also See:

• Be your own de-influencer.
• How to have a financial conversation with teens and young adults.