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Three Gen Z spending habits that may surprise you

by Joni Sweet
    Download the report: Gen Z spending habits before and during COVID-19

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    Gen Z sets itself apart from other generations with a sensible outlook on money. Here are the three most surprising spending habits that influence when Gen Zs break out their wallets—and when they don’t.


    Gen Z is growing up, and as they’re coming of age, so is their spending power. In fact, they’re expected to wield up to $143 billion of direct spending power by as early as next year. Don’t expect members of this generation to blow their hard-earned cash on products and experiences to simply show off on social media, though—Gen Zs take financial responsibility seriously.

    Even though they’re more conservative with money than you might expect, this generation is willing to spend big under the right circumstances. Here are three surprising spending habits that drive Gen Z’s decisions around major purchases.

    Gen Z would rather own than rent

    When it comes to their living situations, Gen Zs prefer to devote their budget to a place of their own instead of a monthly rent bill. Around 100,000 people age 23 and younger had already purchased a home as of last year. Why is this group so focused on homeownership?

    Known for being one of the most success-oriented generations, Gen Z has a clear vision of what personal achievement means. More than 4 out of 10 Gen Zs count financial independence as the primary mark of adulthood. They look at home ownership as an investment in their long-term independence. Culture also plays into their drive to acquire property: 62 percent of Gen Zs believe home ownership is a “key component of the American Dream.”

    This is one of the defining factors that separates Gen Zs from their Millennial predecessors. Whereas the older generation strived for a nomadic, no-strings-attached lifestyle, Gen Z wants to put down roots and invest in their futures.

    Gen Z saves up for big purchases instead of taking on debt

    Gen Z grew up watching people cope with the financial struggles of sky-high student debt and the housing market crash of the mid-2000s. Having seen firsthand how debt can destroy dreams, Gen Z has no interest in making purchases they can’t afford.

    Just look at how they think about financing their higher education. More than two-thirds of Gen Zs express concern about college loans, with only 11 percent planning to go into debt to pay for school. Around 73 percent of today’s undergraduates rely on a job or side hustle to help pay their tuition and education-related expenses.

    Above all else, Gen Zs are sensible about their spending and patient with purchases. The vast majority of Gen Zs say they save up for something they want instead of putting it on a credit card. While this mindset will ultimately put them on firmer financial footing than their parents, it also means Gen Zs are cautious about spending big before they have the means to do so.

    Gen Z’s totally willing to splurge, if an item’s “worth it”

    Despite their distaste for debt, Gen Z is occasionally willing to splurge — if an item or experience is “worth it.” They want to make sure they’re getting the best bang for their buck. More than 90 percent of Gen Zs say they shop for bargains and incentives.

    The more a brand can offer added value on purchases, the more attractive it will be to Gen Zs. For example, a recent UNiDAYS x Ad Age study revealed that 82 percent of Zs are more likely to buy a product if it’s environmentally friendly. And they may even be willing to pay more at mission-focused businesses as well. The idea that a single purchase can have a ripple effect of positive change taps into Gen Z’s sense of altruism and makes them feel like their dollars are going far.

    Living up to social responsibility is just the beginning of how brands can win over Gen Z. They still need to focus on building a pristine online reputation for offering stellar services and products. Social media influences the shopping habits of more than 80 percent of Gen Z. Before they make a purchase, Gen Z will scope out online reviews to make sure whatever they plan to buy meets (or, better yet, exceeds) their expectations.

    Gen Z understands deeply how money affects their lives. Brands that take Gen Zs’ financial literacy seriously now will continue to see their loyalty as they gain spending power.

      Download the report: Gen Z spending habits before and during COVID-19


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