Gen Z has virtually no excuse for financial illiteracy
Now, the cohort is increasingly participating in 'doom spending' – a form of retail therapy that helps consumers cope with everyday stresses – more than older generations. It dovetails with another troubling trend: Almost half of Gen Z – 49 per cent – has decided that saving for the future is pointless, according to a late May Credit Karma survey.
These choices exemplify poor money management skills, a reality that has led Gen Z to blame schools for not teaching them more about how to manage their finances effectively. But of all the generations, Gen Z is the one with no right to complain about the lack of access to personal finance education in school. If any generation had a chance to teach themselves, it is them.
Young adults today have grown up in a world full of easily accessible financial information and services, such as digital solutions for seemingly every method of budgeting. That includes the rise of investing apps and robo-advisers, which provide a low barrier of entry to those ready to get into the stock market. Credit reports and scores are also widely available through free, legitimate services and even credit cards. Gen Zers have had access to content, online and off, that teaches the importance of understanding credit history since before they could apply for a card.
The oldest of Gen Z were only 16 when I started writing about money on the Internet. In the subsequent 12 years, personal finance blogs morphed into podcasts and YouTube shows. Then there was the rise of 'finfluencers' on Instagram and TikTok. Plus, many personal finance personalities with a following got a book deal (me included). There are hundreds, nay, thousands of people across a vast spectrum offering advice on how to handle the almighty dollar.
The democratisation of information should make Gen Z one of the most financially literate cohorts. With answers so easily found on smartphones they carry everywhere, access is hardly an issue. But only 33 per cent of the generation reports turning to social media for financial education, according to a 2025 survey conducted by Spruce, a mobile banking app. However, nearly 70 per cent of them have tried viral trends such as loud budgeting or soft saving compared to 51 per cent of millennials and 27 per cent of Gen X. Of course, the volume of information and competing narratives on topics such as debt repayment or building credit can be overwhelming. It also comes with the potential for misinformation.
A NEWSLETTER FOR YOU
Friday, 3 pm Thrive
Money, career and life hacks to help young adults stay ahead of the curve.
Sign Up
Sign Up
Figuring out what is accurate online can make using the Internet feel exhausting. Lessons on how to navigate the misinformation and learning how to decipher if a sales pitch from a beloved influencer is masking a subpar financial product is critical.
These skills, when incorporated into the school curriculum, might be even more important than basic financial knowledge and habits, because the onslaught of nefarious content online is likely to grow even more pervasive thanks to generative AI.
But the reality is that most of what children and young adults learn about money comes from their home life rather than their schooling. Tossing a single semester-long class into high school graduation requirements, which could be taught by a teacher who is not a personal finance expert, isn't going to be enough to move the needle towards fiscally prudent teens. Parents are the lynchpin in this battle for those coming of age to understand how to budget, save and invest.
Money lessons start to imprint on children much younger than most would expect. A five-year-old child is capable of having an emotional reaction to spending and saving, based on research from a University of Michigan study. There's not a singular understanding as to why and how this happens, but it does mean parents are being watched and can educate well before their child is earning an income of their own. Having an open, age-appropriate dialogue about family finances, modelling good habits and talking through how to save for goals helps lay a foundation.
People with a higher understanding of money basics are more likely to make ends meet and achieve goals like having an emergency savings fund or opening a retirement account, according to the Financial Industry Regulatory Authority's (Finra) 2021 National Financial Capability Study, the most current available.
Of course, the risk of relying on parents to impart wisdom is that they may not be a model example. A preview of Finra's 2025 study, to be released in July, found that only 27 per cent of American adults could answer five of the seven Financial Knowledge Quiz questions. However, with increased access to different resources, there's no reason that parents who themselves feel underinformed need to stay that way.
Financial literacy is one of the most valuable gifts a parent can give a child – even if it means learning alongside them. But for Gen Z, especially those who have already left the nest, gaining that knowledge on their own has never been easier. BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
4 hours ago
- Straits Times
Work-life balance most important factor for Gen Z, millennials and Gen X: Randstad survey
SINGAPORE – Getting their work-life balance right is the most highly valued employment factor for workers in Singapore, no matter what the age, noted a new survey. It even surpasses other value propositions such as attractive salary and benefits, with job security, career progression and equity also trailing behind. The annual survey conducted by recruitment agency Randstad polled around 170,000 people in places like Japan, Belgium, India and Greece, including 2,522 in Singapore. It found that just over 50 per cent of employees here rated 'work-life balance' and 'salary and benefits' positively when evaluating their current employers. This indicates clearly that there is room for improvement in these two factors: While both are top priorities for employees, they are 'rated relatively low' when assessing bosses. 'With salary packages and benefits now highly competitive, work-life balance is emerging as a crucial differentiator for both attracting and keeping top talent,' said Randstad Singapore country director David Blasco. Respondents across generations have differing motivators at work. While work-life balance and attractive salary and benefits remain the top two priorities for Gen Z (aged 13 to 28) and millennials (29 to 44), Gen X (45 to 60) place slightly more emphasis on compensation. The survey also found that equity – a desire to work in a fair and inclusive environment – is one of the most important factors for employees, particularly Gen Z. But employers' equity ratings here slipped from 2024, with only 53 per cent agreeing that their particular qualities are appreciated in the workplace, a 4 per cent fall from 2024 . A decline in equity scores also signals lack of fairness and transparency in the workplace in areas such as hiring practices and offering opportunities to deserving employees. Other findings noted that while Gen Z prioritised strong training and development opportunities, Gen X looked for a financially healthy company. Older generations also tend to be more critical of their employers, especially when it comes to their expectations of a 'pleasant work atmosphere'. Mr Blasco said: 'In the rush to meet targets and deadlines, the employee experience is often overlooked. 'It's the small moments, such as being comfortable sharing different viewpoints, having chances to develop new skills or simply enjoying with teammates that truly enhance engagement. 'These moments not only foster a positive atmosphere but also reduce the likelihood of employees jumping ship to search for better workplaces.' Keeping employees motivated and engaged Work-life balance is also the main factor affecting how engaged or disengaged employees feel, the survey noted. The lack of recognition or appreciation for their work was consistently ranked in the top three across all generations as factors that discouraged staff. The report highlighted that Gen Z are the most engaged, with 68 per cent reportedly feeling motivated in 2025, followed by millennials at 61 per cent and Gen X at 58 per cent. On the other hand, wanting higher salaries and better benefits is the leading factor to prompt Gen Z (57 per cent) and millennials (54 per cent) to leave their current jobs. The lack of flexibility is also a factor, with 23 per cent citing it as a reason to make them quit. A separate Randstad survey found that 31 per cent of workers in Singapore would quit if they lacked sufficient flexibility. 'As flexible work options and alternative income sources become commonplace, prioritising work-life balance is what truly sets employers apart from their competitors in the market,' said Mr Blasco. Even though 49 per cent of respondents felt engaged, companies may already be losing the other half of their workforce, given that less engaged staff (18 per cent) are 60 per cent more likely to consider quitting than their engaged counterparts. Impact of artificial intelligence The use of artificial intelligence (AI) in the workplace has steadily increased year on year, with more frequent users among Gen Z and Gen X. Notably, millennials are scaling back on AI at work, with only 36 per cent reporting frequent usage, a slight decline from 2024. The report also noted that Gen Z feel most threatened by the increased use of AI, with 44 per cent saying it 'has a considerable impact on my job'. Another 6 per cent feel they may lose their job because of AI. Mr Blasco noted: 'Singaporeans are increasingly viewing AI as a work companion, considering it a supportive tool rather than a threat to their job security. 'Companies that highlight their AI achievements as part of their employer branding will stand out in attracting tech-savvy and digital-first talent.' Check out the Headstart chatbot for answers to your questions on careers and work trends.
Business Times
6 hours ago
- Business Times
AI, power, and longevity to drive next decade of transformational innovation: UBS
[SINGAPORE] Investors should consider allocating part of their portfolios to transformational innovation as a way to diversify risks in an increasingly volatile world, said Ulrike Hoffmann-Burchardi, chief investment officer for global equities in the chief investment office at UBS. Among these opportunities, artificial intelligence (AI), power and resources, and longevity are structural growth ideas that can deliver attractive returns in the years ahead, noted Hoffmann-Burchardi at UBS' mid-year outlook conference in Singapore on Tuesday (Jul 1). 'The next US$10-trillion companies will most likely arise from one or more of these transformational opportunities,' she said. AI – which Hoffmann-Burchardi said is 'underappreciated' – will boost productivity to levels unseen before, surpassing productivity in the Internet era. The power and resources sector will likely be driven by the 'acute mismatch' in demand and supply, especially as more electricity is needed for AI data centres. Meanwhile, the ageing population in many economies worldwide will drive sectors that boost longevity or support an older demographic. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Immediate benefactors include biotech, pharmaceuticals and medtech companies, while further opportunities lie in the wealth management, life insurance, real estate, and consumer and leisure sectors, she added. Outlook for H2 For the second half of 2025, UBS expects investors to continue diversifying even as tariff and macroeconomic risks moderate. Tan Min Lan, head of the chief investment office for Asia-Pacific at UBS, noted that global growth will likely slow in H2, especially as front-loading activities stop. Tariffs will likely settle at around current levels – at 30 to 40 per cent for China and 10 to 15 per cent for the rest of the world, she said. Global interest rates are also set to fall further, with the US Federal Reserve expected to cut rates by 100 basis points in the next 12 months from September, said Tan. For investors under-allocated to broad equity markets, she recommends gradually increasing exposure to diversified global stocks or balanced portfolios to position for stronger potential returns in 2026 and beyond. At times of low, or falling, cash interest rates, investors should also seek durable income, she added. Furthermore, investors should lower their exposure to the greenback, as the US dollar will likely weaken over the next 12 months, and the currency's traditional role as a relative 'safe haven' during periods of market uncertainty is under question. This makes gold a highly effective hedge against geopolitical risk, while alternatives – including hedge funds, private credit, value-oriented buyouts, and quality global real assets – will help deliver returns and enhance portfolio resilience. Zooming in on Singapore, Tan views Singapore equities as attractive, as the market offers a defensive safe haven amid ongoing geopolitical uncertainty, backed by a stable currency, generous dividend yields, and a steady earnings outlook.
Business Times
8 hours ago
- Business Times
MAS proposes to improve complex product labelling and disclosures for investors
[SINGAPORE] Investors in Singapore may soon gain clearer disclosures and improved guidance for complex products, following the implementation of proposed amendments by the Monetary Authority of Singapore (MAS). The central bank released a consultation paper on Tuesday (Jul 1) seeking feedback over the next two months on plans to strengthen product highlights sheet (PHS) requirements and streamline the framework for complex products. A PHS refers to a document provided to investors for certain investment products to outline key features and risks. It complements the main offer document, and helps users better understand key product information. Meanwhile, the complex products framework classifies capital market products as 'complex' or 'non-complex' and requires distributors to assess an investor's knowledge and experience. Investors deemed lacking must complete a learning module or receive mandatory advice. In a statement, MAS said the proposals aim to 'strengthen the effectiveness of a disclosure-based regime for investors to make informed choices on their own, while requiring an appropriate level of intervention for consumers who need more assistance'. They come at a time when investors are increasingly empowered to make self-directed investments, supported by the digitalisation of financial services. However, some investors who are less technologically or financially savvy would still benefit from seeking professional advice to better understand the features and risks of the products they invest in. A NEWSLETTER FOR YOU Friday, 3 pm Thrive Money, career and life hacks to help young adults stay ahead of the curve. Sign Up Sign Up MAS invites views and suggestions from interested parties on the proposals, with comments to be submitted via the FormSG link by Sep 1. After the consultation, it will refine the proposals as needed and issue a separate consultation on the draft amendments. A six-month transition period is planned once the changes take effect. PHS enhancements To improve investor understanding, MAS is proposing revised PHS templates that present key product information more clearly. For instance, essential product features will be highlighted on the first page to draw investors' attention upfront. A new 'question and answer' format will also be introduced to better engage users on important considerations. Complex products will be clearly marked with a 'red' label to prompt investors to seek advice where necessary. Additionally, investment-linked policies (ILPs), which were previously exempt, will now require a PHS under the proposed enhancements. MAS is also seeking to standardise PHS requirements across different investment products. It plans to host mandatory PHS templates on its website instead of setting them out in the Securities and Futures Act's regulations, allowing more flexibility for future updates. It also proposes removing different page limits for PHSes based on the use of diagrams. Under the new format, which incorporates diagrams where appropriate, PHSes for asset-backed securities, structured notes, collective investment schemes (excluding REITs), and ILP sub-funds will be capped at eight pages. Revisions to complex products framework MAS sees 'room to streamline the complex products distribution safeguards' by shifting towards a more disclosure- and information-based approach. The proposals include removing the requirement for mandatory financial advice in most cases, introducing a product knowledge assessment (PKA) and applying targeted safeguards for investors who may need additional protection. These changes follow MAS' periodic review of the complex products framework to ensure it remains fit for purpose amid evolving market conditions and the increasingly diverse investment needs of Singapore's retail investors. . The central bank is looking to remove the requirement for mandatory financial advice even where the investor does not have the qualifications, experience, or knowledge to invest in the product, except in the case of those who require added protection. 'With clearer complex product labelling and investor-friendly PHS disclosures, investors will be in a good position to make considered, informed investment decisions,' said MAS. Investors requiring additional protection, known as selected clients, will still need to go through a mandatory financial advisory process before transacting in complex products. This includes safeguards such as having a trusted individual present during the advisory process and a follow-up call to confirm the investment decision before proceeding. To further support investor understanding, MAS is introducing the PKA as an alternative to assess product-specific knowledge. Unlike the existing customer account review (CAR) and customer knowledge assessment (CKA) which focus on general experience or qualification, the PKA tests an investor's understanding of a product's specific features and risks. Under this approach, a non-selected client, such as a 40-year-old software engineer with no trading experience, would receive a risk warning before proceeding with an investment in a complex product. If the client acknowledges the risks, they may proceed without financial advice. In contrast, a selected client, such as an 80-year-old retiree with limited English proficiency, would be required to undergo a full advisory process with added safeguards before completing the transaction. 'Timely changes' Industry observers have welcomed the proposals, with the Securities Investors Association (Singapore), or SIAS, calling the changes 'timely and necessary given the evolving investment habits of investors'. In particular, SIAS supported the move to introduce a clearer, more reader-friendly PHS, especially for complex investment products. David Gerald, the president of SIAS, noted that the use of a 'red' label to clearly flag a product as 'complex' and the reorganisation of content to present key risks upfront on the first page of the PHS will help investors quickly identify the nature of the product and make more informed decisions. Noting that investors today are increasingly savvy, he pointed out that many conduct their own research, make independent investment decisions, and even trade complex products online, both in Singapore and overseas. 'The new streamlined framework for complex products strikes the right balance — introducing sufficient safeguards to help investors understand the risks, while preserving their autonomy to choose products that suit their investment goals,' he said. However, he cautioned that investors active in overseas markets may not realise they face the same product risks but without the protection of Singapore's regulations or recourse through SIAS if disputes arise.
