There’s an adage that says those who don’t look ahead remain behind. Looking to the future and planning for it is what makes it possible to seize great opportunities, especially in the realms of marketing and finance, which, as it turns out, are intricately linked.

The marketing angle is what led us to seek a better understanding of Gen Z, specifically the upper echelon, which we call Elder Z. Elder Z was born between 1998 and 2004 (vs. 1998 and 2013 for Gen Z as a whole).

Currently ages 16 to 22, Elder Z will soon be of great importance to brands and marketers – half of them are already in the workforce. Despite their comeuppance, not much is yet known about this generational segment. So, in late 2019, Hiebing conducted primary quantitative research (N=608) to learn more about who they are and what matters to them (more here).

The financial angle came into play because Elder Z’s earnings potential and purchasing power are on the rise. So we asked them questions about money, specifically their expenses, spending habits, definitions of success and more. Our learnings offer a starting point for marketers – particularly those in finance and finance-adjacent categories – who will soon be investing their time and money to woo Elder Z.

Elder Z Key Money Themes

Elder Z is not quite there yet, with varying degrees of general and financial independence. About 75% of them are still in school, and 56% percent are still living with a parent or guardian. Of the half of Elder Z who work, they averaged just $755 in income per month – but this will quickly grow over time. As such, their life stage and background are primary drivers of their views and habits.

Family Matters, as Do Financial Institutions

Elder Z (> 80%) largely believe their parents are trustworthy, savvy and supportive on the financial front. But they may not yet have the knowledge to identify where their parents’ guidance may fall short.

Although Elder Z is composed of smartphone-dependent digital natives, at this point they have yet to wholly embrace mobile banking or money-saving apps.

While half of Elder Z generally avoided in-person visits to banks and credit unions, 85% percent of Elder Z said they find it reassuring to have a physical space to go if they run into an issue. And because 66% have a financial services app on their phone, there is opportunity for financial institutions to step in as solid resources where family savvy comes up short.

Financial Stress and Insecurity Are Norms

Elder Z is an anxious group, and many describe themselves as financially insecure – struggling to pay bills and worrying about the debts they’re incurring because of college.

Given their life stage, it wasn’t shocking that 68% said they’re stressed about money. But what intrigued us was the fact that housing and food expenses were eating up their budgets in nearly equal measure. Here’s a closer look at where their money goes.

• 30%: Housing
• 29%: Food, includes at home and eating out
• 25%: Car-related expenses
• 24%: Clothes, shoes, jewelry
• 15%: School fees
• 9-10%: Entertainment

Financial best practices state that one should allocate 50% of their budget to essentials, inclusive of housing and food. Elder Z’s current habits may not be setting them up for success in the long run.

Optimism Abounds

Despite their anxiety, Elder Z said they feel hopeful about the future: 87% believe their finances will be better later, with 66% saying they would likely have a better standard of living than their parents.

Outlooks are divergent by background, however. Those from less well-to-do families feel the weight of the finances more heavily, but still remain positive about their future standard of living.

That said, regardless of background, Elder Z expressed more optimism about finances with age, which aligns with opportunities and financial gains associated with joining and moving up in the workforce.

Long-Term Investments Aren’t on Their Radar

Surprisingly, only 38% of Elder Z anticipate having an IRA or 401K, and just 18% believe stocks/mutual funds will be part of their future. This suggests they may hold different beliefs or expectations around historical asset-building properties. But it’s possible they’re just not there yet, or their idea of what’s financially sound may be different from previous generations.

Financial Success Means Independence and Stability

Being financially independent was really important to them, as they said they wanted to avoid asking for help and burdening others. Rather than aspiring to luxury, Elder Z defined financial success as not having to stress about how they’ll eat or pay bills. To them, being comfortable means having enough money to take care of themselves and their families, as well as some money to spare for some nice-to-haves, future bills and emergencies.

Key Implications for Marketers

Given Elder Z’s age and life stage – as well as their anxiety concern and stress about money – it’s going to be critical for brands to strike the right tone when seeking to connect with this generational segment. Because of their habits, social media will serve as a primary connection point. Platforms should be leveraged to engage, inform and entertain them in order to pique their interest and build a relationship with them. With that in mind, here are some specific opportunities for marketers.

Become a Trusted Advisor

Elder Z’s resources for financial advice are a mixed bag, which gives brands great opportunities to do hand-holding and mentoring. Also, because their smartphones are their lifelines, there are countless means for getting tools into their hands to give them a better grasp on choices and habits to manage their spending, savings and planning upside for now and later.

Also, due to the fact that not all of Elder Z’s parents are financially savvy, it’s worthwhile to consider building fun, gamelike interactive content and resources for parents and children to endeavor together.

Ideas might include preparedness around what life really costs, managing cash flow, auto loans, mortgages and common financial pitfalls to avoid. This will help them to achieve their version of financial success, i.e., having enough funds (and managing them well) to cover the essentials and have a little leftover.

If you are a financial institution that already has a lot of these tools, it’d be worthwhile to consider allocating some marketing dollars to promoting them – knowing that Elder Z needs them.

Shine Light on Planning Potential

Elder Z may be vastly underestimating the long-term importance of an IRA/401K and stocks/mutual funds. This creates the opportunity to help them understand the value of financial planning specific to investments and retirement, underscoring how just saving a little now can make a big difference later (think: compounded interest).

Not only that, they may also need planning for bigger purchases like a home or car. Only 24% of Elder Z expected to take out an auto loan, which may mean many expect to have saved enough to buy a car outright. Teaching them how to do that – or evaluate available auto loans – will be important, given that many live in rural or suburban settings where cars are essential.

Connect the Dots Between Finances and Insurance

Health, auto, renter’s and mortgage insurance have varying degrees of relevance at this point in Elder Z’s lives, but all have the potential to affect their financial fitness in the near and long term.

Of those surveyed, 29% had auto insurance, 8% had renter’s insurance and 5% had mortgage insurance. However, 63%, 24% and 42% of respondents said they consider auto, renter’s and mortgage insurance, respectively, to be an expected part of life.

Given Elder Z may procure these types of policies in the years ahead, there are opportunities for companies to create a better understanding of the relationship between the categories of finance and insurance in life (and in business). Themes might include how to vet plans, what is essential, how small expenses now can help them avoid potential unexpected setbacks in the future (e.g., renter’s insurance), when to consider upgrades or downgrades in coverage and the importance of shopping around.

There’s no time like the present to think about and plan for the future, and that includes the people who will be part of it. Elder Z will no doubt be important to your company, and the opportunities for your brand to serve them will be many. Be sure to seize them.

Interested in how research can strengthen your brand’s connection with customers? Email Ted at tjun@hiebing.com to set up a call.

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Looking for more?

• Introducing Elder Z Insights for Marketers
• What Elder Z’s Social Habits Mean for Marketers
• Now Serving Elder Z: What Restaurant Marketers Need to Know No