In our rapidly evolving digital age, financial literacy has emerged as a cornerstone for economic resilience and personal empowerment. For financial institutions, providing financial literacy education for Gen Z is not merely a strategic move but a societal imperative. As the first digitally native generation, Gen Z wields unprecedented influence and potential, and their financial acumen will shape the economic landscapes of tomorrow. Here’s how financial institutions can utilize financial literacy to build a future-ready customer base with Gen Z.
Why Financial Literacy Matters for Gen Z
Digital financial education that is delivered in a trusted setting like a classroom can provide the building blocks that young people need to think more seriously about their relationship with money. This, in turn, can lead to tangible action as students start setting up savings accounts and making major money decisions, including financing higher education. Literacy is the first step in this equation – knowledge-building has a powerful impact, but confidence-building is the true motivator that will lead to action. When it comes to selecting a financial institution as a partner, they may first think of the one that helped build the foundation for their financial confidence.
Key Financial Education Challenges Faced by This Generation Today
High school students today receive varying degrees of financial information outside of the classroom. They may rely on social media influencers on platforms like TikTok, which may provide inaccurate or misleading information that isn’t directly applicable to their needs. Depending on their parents’ own relationship and confidence with money, they may not receive a lot of guidance in the home. This can lead to stress and anxiety for teenagers who don’t know how to embrace financial independence when they’re older. That’s why it’s crucial for banks to provide financial literacy education in the classroom – it demystifies the topic and aims to help young people feel more comfortable discussing it with their peers. From budgeting and saving, to navigating student loans, to understanding what to do with their first paycheck, financial education puts students on an even playing field, in a non-judgmental way.
The ROI of Financial Education
When considering the ROI of financial education, it’s important to consider what could be the result of a lack of sufficient financial education. For example, if a teenager doesn’t have a plan for financing higher education, they may be susceptible to taking out large loans and not fully understanding what they’ve signed up for. They might not finish college because of the financial burden that it has caused them, which could affect their career prospects – and make it even harder to pay back the loans they do have. They might not consider certain careers, like the trades, that may be a better fit for their skillset and fall into a career path that doesn’t have longevity. They may find themselves in severe credit card debt because they struggle with saving and living within their means. These are all issues that could be alleviated by proper, reliable financial education. For an institution, this means fostering positive and forward-thinking relationships with Gen Z rather than having to immediately resolve challenges.
The Benefits of a Financially Literate Gen Z
Investing in the financial literacy of Gen Z yields significant benefits for both individuals and financial institutions. Financially literate individuals are better equipped to make informed decisions, avoid debt, and achieve their financial goals. This empowerment leads to greater financial stability and independence. By providing valuable financial education, institutions can build trust and loyalty among Gen Z customers. A financially savvy customer base is more likely to engage with and remain loyal to financial services providers that prioritize their education and well-being. A generation of financially literate individuals contributes to overall economic resilience. They are more likely to invest wisely, start businesses, and contribute positively to the economy.
Sponsor Digital Courses to Enhance Financial Literacy
Financial institutions have a unique opportunity to shape the financial futures of Gen Z. The benefits extend beyond individual empowerment, fostering loyalty and contributing to broader economic stability. As Gen Z navigates the complexities of the financial world, institutions that prioritize their financial literacy will be well-positioned to build enduring relationships and drive long-term success. EVERFI is well-equipped to help financial institutions do just that by helping them sponsor financial literacy education in schools due to our rich network of relationships with school districts and educators. Learn how your institution can take the first step in fostering a future customer base by going to everfi.com/sponsorship.