My generation was called “slackers,” but my Generation Z son is one of many teens proving the pendulum is swinging back to a strong work ethic. The “Zippies” are ushering in the age of financial responsibility.
As the parent of two teen boys who are on the older side of the Generation Z timeline (born 1992 to 2011), I can say it’s been a breeze to teach them about personal finance. I don’t worry about my Zippies running up credit card bills or expecting me to pay for their condo in the city!
Gen Z children tend to be more frugal, self-directed and individualistic compared to the Gen Y children of the Baby Boomers, researchers say.
According to the Grail Research “Consumers of Tomorrow: Insights and Observations About Generation Z” report, Gen X has taught their children to be tolerant, respectful and responsible.
My Gen Z children are pretty receptive to my suggestions about finances, but I know they are a product not just of their upbringing, but of the era in which they grew up.
Keeping that in mind, here are a few of the ways I teach my Gen Z children about money:
Born in the digital age, researchers also call Gen Z consumers “digital natives.” Because of that, I skipped the lesson on balancing a physical checkbook and went straight to online banking.
Some banks will allow your teen to have their own online banking account at 16. I also highly suggest showing your child how to open an account with a discount brokerage firm. I showed my sons a few websites to check daily stock quotes and research stocks.
An interesting thing I’ve noticed about my sons is that they have no interest in borrowing money for a house or a car. They have always talked about saving and buying with cash and avoiding debt. Experts say that many Gen Z teens dislike the idea of borrowing money.
Because of that, I started early with different accounts for saving and investing. Considering no one warned me of high rates when I received hundreds of credit card applications in college, I’m relieved my sons are averse to using credit cards.
You don’t need a good credit rating if you don’t need to borrow.
Make money doing what you love
Gen Z individuals have practically invented the idea that you should make money doing what you love to do. Although making money is essential for survival, I know better than to encourage my sons to go for fame and money.
They gravitate toward careers they enjoy. My older son, who started designing websites for people for free in the ninth grade, just got his first “job” as a pizza delivery boy and loves it. He started a lawn mowing business at 12.
Because my children have lived through turbulent bear stock markets and global economic recessions, I understand why they would tend to be more financially conservative.
I have explained to them that they can still invest in stocks by owning mutual funds and exchange-traded funds that include a balance of many stocks and bonds. They may never experience a 78 percent jump in an individual stock’s value in one day, but they will feel more secure and their money will grow over time.
Stock market chat rooms
Since Gen Z children are very tuned into online social networking, I have warned them about stock market chat rooms.
It’s great to research a company online, but some people in financial chat rooms have hidden agendas in that they will benefit if a stock crashes or takes off. I explain how some people short a stock, and make money when a stock goes down in value.
Even though Generation Z children are expected to be extremely well educated, personal finance is still a subject generally taught at home.
I’m fairly certain my children and other Generation Z people will be part of the “individual investor revolution,” by trading stocks online. With Gen Z doing it on their own, I imagine stockbrokers will depend on Generation Y for their client base.
In a nutshell, teaching Gen Z children about finances looks nothing like it did when our parents showed us how to balance a checkbook. And if your parents were anything like mine, that’s where the financial lessons ended!