Pop Quiz, Hot Shot! Do You Know Your Gen Z & Millennial Customers’ Top 5 Financial Concerns?


Right now, the economy is facing decades-high inflation and ongoing supply chain issues brought on by the pandemic, rising gas prices, and interest rate hikes. Jamie Dimon even referred to the economy as an incoming hurricane, warning investors to “brace yourself.”

But for the everyday American, especially young adults, managing their personal finances may feel more like being on Bus 2525, with Keanu and Sandra side-swiping cars, hitting construction barrels, and flying across bridges, all to avoid a total disaster. It’s confusing and scary, and your customers have serious concerns. They are, in fact, bracing themselves.

As Dennis Hopper famously put it: pop quiz, hot shot! Today’s biggest question for bankers is how well do you know those concerns so you can provide solutions to address them.

Naturally, Americans are nervous and have many questions, especially younger customers with less experience navigating a recession.

Consider that the last major recession was nearly 15 years ago. Since that time, about 75 million American consumers have reached adulthood. This means almost a quarter of the population (22.5%) has not experienced a recession firsthand. Most of what these individuals know about navigating a downturn is what they’ve read or been told by family members.

The good news is that your younger customers want to understand the current economy and want guidance on how best to manage their finances. This is an opportunity for banks, but it requires truly understanding your customer’s concerns to provide solutions-driven personalized financial guidance in a relevant, meaningful way.

  1. Young Adults Are Concerned About The Widening Wealth Gap

Three-quarters of Gen Z and Millennials believe the wealth gaps in their respective countries are widening. They are right to be concerned, as a recession could speed up and expand this gap. Cost-of-living continues to increase in every category, yet wages are not rising to align with inflation. Gen Z and Millennial dollars today aren’t able to stretch as far as they previously did.

Supporting this notion, the majority of workers (66%) reported that any salary gains they’ve received in the last year have been outpaced by inflation. Additionally, entry to mid-level workers – mostly comprised of Gen Z and Millennials – may feel a stronger impact than workers who have progressed further in their careers and have higher salaries.

  1. Young Adults Are Less Likely to Buy Homes, Even Though They Want to

Most adults across both generations want to buy homes, but affordability is challenging. Gen Z adults and Millennials identified the most common barriers to homeownership as insufficient income, inability to save for a down payment or closing costs, and rising home prices.

Over the last couple of years, home prices have risen sharply, pushing many would-be homeowners out of the market. Starter homes that Millennials and Gen Z may have been able to afford in the past quickly became unaffordable. Consequently, young adults are delaying purchases and instead extending lease agreements on apartments and rental homes.

  1. Young Adults Are Delaying Savings Because of Student Loan Debt

Across all generations, Americans hold more than $1.7 trillion in student loan debt. Of those who took out student loans, 74% of Gen Z and 68% of Millennials delayed a major financial decision because of their debt.

Overall, 27% have delayed saving for emergencies, and 26% have delayed saving for retirement – two critical savings categories for young adults. A recession would make saving even harder.

  1. Young Adults Are Concerned About Cost-of-Living Increases From Rising Inflation

Inflation is at a 41-year high, with half of Gen Z and Millennials now living paycheck to paycheck. Additionally, a recent Deloitte survey found that cost-of-living, including housing, transportation, and bills, is the top concern for 29% of Gen Z and 36% of Millennials.

Not surprisingly, many young adults have gone home to live with their parents and lower their expenses. With increased living costs and stagnant wages, Gen Z and Millennials will be increasingly attentive to their budgets.

  1. Young Adults Are Concerned with Finding Long-Term, Stable Jobs

Gen Z and Millennials are particularly focused on working with employers that offer a great company culture, but that doesn’t mean they’re not focused on long-term job stability, too.

Contrary to popular belief, most young adults are not fleeing from jobs the moment they face struggle. In fact, a survey from iCIMS found that 91% of undergraduates and recent graduates care about how long they stay with an employer, and almost 70% see themselves staying with an employer long-term.

Entrepreneurship is also up among young adults. A record number of Millennials are turning to self-employment, with nearly one in three having started a small business or side hustle, according to GoDaddy’s State of Entrepreneurship.

The growing gig economy also appeals to both Gen Z and Millennials as a flexible way to earn additional income. Websites like Fiverr and Upwork have gained traction, with more individuals looking to tap into the freelance world without the entrepreneurial risks.

Young adults will have concerns and questions as the economy continues to experience turbulence. Simply urging consumers to brace themselves isn’t really a solution. Banks need to understand the current concerns and ensure they are providing the appropriate tools and resources that matter to their customers the most. With personalized financial guidance, financial institutions can impact young adults’ financial health and well-being.

Digital banking platforms must go beyond standard features like checking account balances and address customers’ pain points by providing an engaging and customized financial journey guide. It’s not just about flashy apps; they must be relevant. Otherwise, banks risk losing their customers’ attention and their business. Instead of customers hanging on for dear life on the Speed bus, it will be bankers.

About Author:
Parker Graham is the founder and CEO of Finotta, a provider of embedded fintech for digital banking. For more information, visit