Gen Z is a generation intensely focused on setting themselves up for financial success. In a study recently conducted by the Step app, 87% of teens consider saving money to be a priority. Of the near 3000 survey respondents, 75% of the teens have already set financial goals for 2022.
How are teens going about that?
According to the survey, 63% of teens said they get the majority of their financial advice from their parents. However, only 42% of teens have any savings, and the vast majority (85%) rely mostly on cash for both saving and spending. Data collected by Piper Sandler shows that 35% of teens do not have a traditional bank account, which can make saving even more difficult.
All those factors combined lead to a reliance on parents, which may impede learning as, of the teens who completed the survey, 40% of their parents currently do not have any savings. 42% of the parents surveyed also tended to turn to family for financial advice. This data further promotes the idea that lack of savings is a learned behavior.
Step, a teen banking app featured in this Retirement Daily article, is launching Step Saving Goals to help teens become better savers. According to the press release, Step Saving Goals allows users to switch between saving and spending tabs and a feature where they can choose popular existing saving goals or create a unique goal. The saving tab can also have specific pictures to accompany the goals. Parents and teens can make direct contributions to the savings goals along with monitoring how close they are to reaching them.
When the goal is achieved, Step will send a congratulatory note to acknowledge the milestone.
Of the 100,000 teens given beta access to this feature over the past month, 22% were making regular contributions to their savings goals, which can be a difficult skill to learn. Almost 500 of the teens have accomplished their savings goal within one month.
For the launch of this feature, Step is offering for a limited time (through January) that 5% of all purchases made with the Step card (or up to $100) will be deposited into the savings tab.
Teenagers want to start saving money and they will often turn to their parents for advice on how to start. Parents should work to help equip their teens with useful saving methods and tools. When the time comes for Gen Z to guide the next generation with money habits, they’ll be prepared.