Generation Z (Gen Z) is feeling stressed, anxious and overwhelmed with their relationship with money, reports Interac.
Gen Z is now entering the workforce, taking on financial ‘firsts’ like purchasing groceries, paying rent and saving for holidays. Interac research finds that Gen Zs are more likely to feel stressed (42%), anxious (37%) and overwhelmed (31%) than any other generation when it comes to their financial situation. With this, Gen Z admits to leaning on debit to take charge of their finances. As a self-proclaimed debit-first generation, Gen Z is more likely (70%) to frequently use debit. This compares to 55% of non-Gen Z Canadians polled, as they adjust how they manage everyday spending.
Nearly eight in ten Gen Z respondents agree inflation (78%) and the cost of everyday essentials (75%) are two external factors influencing their ability to manage finances. Canadians overall appear to be shifting their spending in response. Year-over-year, Interac transaction data shows an increase in the number of transactions with Interac Debit at grocery stores and supermarkets as average basket sizes have decreased.
Canadians shift where and how they spend
This suggests consumers are transacting more frequently, with smaller basket sizes, perhaps to lessen budget strain. Likewise, discount merchants are seeing greater transaction growth than their premium counterparts. This suggests Canadians are shifting where and how they spend to stretch their dollars further.
“While we are seeing the economic environment shape purchasing decisions, essential spending continues and consumers are leaning on their own money as evidenced by the year-over-year growth in Interac Debit (5%) and Interac e-Transfer (11%) volumes,” said William Keliehor, Chief Commercial Officer, Interac. “In times of uncertainty, debit remains an empowering tool to help Canadians of all generations, including Gen Z, stay in charge of their finances.”
Different style of financial advice needed to help Gen Z
Interac argues that a different style of financial advice is needed to help Gen Z take control. Gen Zs (37%) agree that financial advice would be more beneficial if it focused on the emotional aspect of managing your money, compared to only 21% of Boomers surveyed. Older Canadians stick with traditional sources for financial advice, such as financial advisers. But Gen Zs were found most likely to seek out support from their immediate network like older family members (73%), siblings or cousins (20%) and friends (21%).
Daria Hill, VP, Marketing & Communications at Interac added: “This generation is bringing a different perspective to their finances. That is, one that demands next generation financial literacy resources in line with their values and realities.”