“Dave, who?”

Dave Ramsey has been a household name in personal finance for decades. His popular radio program often has people call in to air their “Debt-Free Scream” to celebrate their liberation from debt. But while Dave remains popular with many adults, Generation Z is not a fan.

Instead, the digital native generation is getting money advice in their natural, digital habitat – social media. One survey last year found that 69% of Gen Z take their financial advice from Instagram, with TikTok being another go-to for money tips.

The platforms contain many videos that espouse the virtues of cash stuffing, financial cleansing, couponing, and more. As cool as viral “FinTok” challenges may be, this content isn’t exactly giving the next generation a well-rounded financial education.

According to a 2022 survey by ConsumerAffairs, almost half of Gen Z participants (46%) do not follow a monthly budget. The survey also revealed 60% of Gen Zers do not have a savings account. However, despite their lack of enthusiasm for traditional banking, two-thirds of Gen Z respondents reported having more invested in cryptocurrencies than in their life savings.

“Our findings suggest that most of Gen Z adhere to somewhat unorthodox personal finance practices,” said Cassidy McCants, deputy editor at ConsumerAffairs. “Of course, eschewing budgets and savings accounts might become less common as members of Gen Z age.”

The findings point to a gaping hole in the market. With the young showing a thirst for financial knowledge, there is a huge opportunity to engage and educate the next generation. Financial advisors who can connect with the younger audience through relatable content will be well-positioned to mentor this demographic as they mature in the years ahead.

Zig-Zagging

While they’ve just begun their financial journey, the young are off to a shaky start.

Like Millenials before them, the average American Gen Zer has accumulated less wealth than either Gen-X or Boomers had by the same age.

Growing up through the 2008 financial crisis and coming of age amid the pandemic, their economic outlook is rife with pessimism. A McKinsey study last year found that a quarter of Gen Zers doubt they will have the money to retire one day. Only about 40% expect to own a home.

According to Investopedia, Gen Z is most interested in tax, saving, borrowing, and debt. They are also big on investing, with more than half of Gen Z adults already holding assets of some form.

Finfluencer Universe

To navigate the world of finance, Gen Z is taking their cues from financial influencers (or “finfluencers”) who amass large followings on social by sharing money know-how. Some teach the basics of dividend investing, while others supply strategies for paying off mortgages early. Every finfluencer has a different niche, as do the financial thought-leaders of traditional media.

Dave Ramsey, for example, is a get-out-of-debt guru. Having lost millions in his twenties, Ramsey knows what it means to lose everything and rebuild from the bottom up. He has grown famous for showing the way out of debt, and many people find his tips, such as his Baby Steps strategy, highly effective. Growing wealth is not Dave Ramsey’s specialty, and some have pointed out flaws in his investing advice, particularly on annual return-on-investment (ROI) projections.

One of Gen Z’s favorite finfluencers is Humphrey Yang, a 34-year-old ex-Merrill Lynch creator who reached over 3 million viewers on TikTok last year. The former entrepreneur told Fortune Magazine he started creating online content to “answer common questions about personal finance that my own friends were asking me.”

Then there is Graham Stephen, a car-loving YouTuber who makes videos on financial independence, saving money, and investing, especially in stocks, cryptocurrencies, and real estate. The former realtor started his YouTube channel in 2016 to share his experiences in that industry. He has gone on to accrue over 4.2 million subscribers through his personal finance content since.

For all the tips and tricks Gen Z can learn from videos, this content has one fatal flaw. Because it is for a mass audience, it is rather generic. Most social media money gurus don’t have the time or the qualifications to provide personalized advice. As they progress deeper into adulthood then, more Gen Zers will likely seek out certified professionals who can create tailor-made solutions to tough financial decisions.

Like generations before them, Gen Z will look to those who’ve come before them for guidance. Yet older financial advisers can’t assume experience alone will make them attractive role models for this young cohort. They’ll need to find their voice on Gen Z’s platforms to get noticed.

Advisors will also need to be familiar with digital assets, like cryptocurrencies and NFTs, which are popular among younger investors. They can make an impact by taking the time to see the world from their perspective and create content that reflects Gen Z’s values.

Gen Z will shape the future of finance. Those who get proactive and engage them where they are can guide the next generation and learn from them along the way.

This article was produced and syndicated by Wealth of Geeks.

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