Financial literacy key for money-anxious Gen Z

According to the 2024 MLC Financial Freedom Report, despite having fewer financial obligations than those in later life stages, Gen Z are the generation most likely to worry about their finances.

The research, based on surveys of 2,507 Australians across diverse demographics, found that 49 per cent of Australians that fall within Gen Z worry about their finances either all the time or often, with Gen X only slightly less anxious at 47 per cent.

Millennials fared slightly better at 44 per cent, while Baby Boomers were far more at ease than their younger counterparts, with just 26 per cent indicating such consistent worry about money.

“This suggests a counternarrative to common perceptions of [Gen Z] being flippant with money or carefree. This financial anxiety may also be a key motivator in their more proactive attitude toward financial management,” the report said.

The research noted that, particularly for those falling in the younger demographics, financial independence is a key element of their aspirations.

Indeed, half of Gen Z defined financial wellbeing as having no financial stress or worries (51 per cent) or having the financial freedom to make choices (50 per cent).

Interestingly, one of the ways that Gen Z Australians are looking to deal with their concerns is through “proactively taking steps to diversify their income”.

“Three in ten are working on building additional income streams (29 per cent) and one in five are investing in shares to strengthen their financial position (22 per cent), suggesting a forwardthinking approach to their finances,” the report said.

“However, there’s a clear indication of the need for enhanced financial literacy, with nearly two in five Gen Z believing they need more help with taxes (39 per cent) and investment strategies (39 per cent).”

According to Dr Ben Neilson, a financial adviser at Complete Wealth, providing free literacy offerings to clients’ children is “essential to develop the capabilities of future clients”.

“We need them to be at a level where they can make decisions fast. Research shows that having financial literacy promotes a high level of wellbeing but very few pieces have assessed how to develop financial literacy levels in bulk quantities,” Neilson told ifa last month.

“We’re running down the rabbit hole of developing a course content that consumers can access to increase their levels of financial knowledge. The interest is increasing, and the needs and resources are evident.

“Many are looking at how to serve future clients, few are looking to create vast quantities of future clients through mutually beneficial fee endeavours such as financial literacy courses.”