In the United States, millennials and Gen Z are currently the two largest population groups of all generations, with 72.2 million and 69.6 million people, respectively. Together, these generations have an unprecedented impact on the economy that will only grow as more members of Gen Z reach adulthood.
Being aware of how younger customers view and handle their finances is essential for any bank or credit union looking to engage with younger generations. If your financial institution wants to stay competitive with the world’s largest growing customer base, you’ll need to know how to stay relevant and meet their unique needs.
How Do Millennials and Gen Z Feel About Their Finances?
It’s already tricky to talk about money with customers when so many adults today consider finances a taboo topic. But this social stigma has a negative effect on your customers’ ability to manage their finances, with 57% of Americans noting that their lack of financial literacy has impacted their financial future.
On top of that, finances are confusing to most people. One survey asked Americans to indicate the most confusing financial tasks and found that nearly 27% marked taxes, over 24% marked retirement, and almost 18% marked buying a home. Plus, recent inflation has caused over 18% of adults to cut back or pause saving for retirement, and over 32% stopped contributing to their emergency fund.
Additionally, younger generations tend to struggle more with managing their finances, with more than half of millennials and Gen Z labeling themselves as emotional spenders resulting in two-thirds of both generations taking on debt and nearly 40% of Gen Z stating their emotional spending is out of control. Plus, they’re more likely to use buy now, pay later services and use mobile cash advance apps than older generations.
This lack of financial awareness could mean your younger customers are at higher risk of falling into poor financial health. Furthermore, a recent study found that 73% of millennials and 66% of Gen Z live paycheck to paycheck. Younger generations are likely avoiding thinking about their financial state due to recent economic uncertainties and will need more guidance on how to manage their finances.
What Can You Do to Help Millennials and Gen Z Face Their Finances?
Your younger customers want to learn more about managing their finances, and providing the resources they need builds their confidence, which helps your bank or credit union’s bottom line. Follow these tips to help your customers become financially aware:
- Reach Out — Don’t give them a chance to ignore or forget about their finances. Provide timely financial updates or use an email newsletter service to engage with younger customers.
- Grab Their Attention — Most millennials and Gen Z will have hundreds of emails queuing in their inbox daily. If you want them to open and read your content, hook them in with an eye-catching subject line and visually interesting emails.
- Make Money Less Confusing — Create accessible content that breaks down financial topics into a digestible format that doesn’t use industry jargon or terminology.
- Know Your Audience — Make your content resonate with your audience using relevant topics that address their wants and needs. Analyze your data to better understand customer engagement and pinpoint which topics millennials and Gen Z find most valuable.
- Be Aware of Digital Fatigue — Many members of these younger generations may be experiencing digital fatigue, which can stunt your marketing efforts. Learn how to optimize your email marketing to re-engage your customers if they’re experiencing digital burnout.
It’s important to make sure your millennial and Gen Z customers don’t ignore their finances and make costly mistakes. So adapt your marketing to engage your customers so they’ll want to stay financially aware and in turn learn to trust your bank or credit union.