4 Personal Financial Management Tips for Gen Z

The unpredictable factors of a volatile life require Gen Z to equip themselves with personal financial management skills as well as develop a flexible plan to avoid struggling with financial problems. Here are 4 personal financial management tips for Gen Z.

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1- Develop a financial plan and strictly implement it
2- Track savings and spending continuously
3- Set up an emergency fund
4- Avoid sudden shopping

1- Develop a financial plan and strictly implement it

At present, half of Generation Z is working. Early in their careers, Gen Z often comes up with a plan that addresses short-term and long-term financial goals separately. But with the YOLO lifestyle of young people, sometimes they forget the financial goals they have set and often fall into “out of money” status before the month is over.

According to financial experts, discipline in personal finance is considered an important factor because in life, finances will change constantly. By setting up a financial plan, Gen Z can begin to take control of their life by tracking, proportioning, spending and budgeting to determine financial status and make reasonable adjustments.

4 Personal Financial Management Tips for Gen Z How does Gen Z manage money?

Gen Z is also advised to save for maximum financial flexibility. Gen Z should allocate savings amount to emergency fund, retirement savings and taxable investment accounts.

2- Track savings and spending continuously

According to financial experts, budgeting that incorporates technology across apps should be adopted by Gen Z to pay fewer bills, saving both time and money.

Creating a budget sometimes takes a little initial effort but over time, Gen Z won't even have to think about budgeting anymore because it has become the habit ingrained in the subconscious.

3- Set up an emergency fund

Every one of us has heard about emergency funds at least once in a while. An emergency fund is a savings account used only for emergencies such as covering expenses after a job loss or unexpected medical bills. An emergency fund is not a special type of account but a separate savings account.

Gen Z is one of the groups that currently have to adapt to many volatile situations of the world economy. With the unpredictable financial situation since the Covid-19 pandemic happened, many people have taken advantage of an emergency fund. The pandemic is a prime example of why we should set aside at least six months of savings for an emergency fund, just in case, any contingencies happen.

Experts say that in order to have an emergency fund, we should have the habit of saving early.

With an emergency fund in place, Gen Z can also confidently start entering new areas of investment which we can start putting our money to work for us to create more money.

4- Avoid sudden shopping

The explosion of e-commerce has changed consumer behaviours towards more costs. Thanks to the convenience, sudden shopping is cluttering up consumer rooms. According to Statista, in 2018, about half of all purchases made by 18- to 24-year-olds in the United States were the result of sudden shopping.

But there are still some Gen Zers who shop selectively, read reviews and make make a conscious decision before buying a product. It can be said that the habit of looking for more reference information from many websites before deciding to buy helps reduce the "bringing all cart home".

The above 4 personal financial management tips for Gen Z on building a scientific spending management plan and practicing reasonable spending habits can help Gen Z solve their financial problems and stand firm in the face of unexpected incidents in life.