Coughing up cash for non-essential purchases
Some younger North Americans are falling prey to pricey fads, with a substantial 38% of Gen Z confessing to buying a viral item, like a Stanley water bottle, just so that they could post about it online.
Others are also paying for convenience, with 70% of Gen Z and 68% of millennials relying on food delivery services because they felt too lazy to cook or go pick up take out. By comparison, less than a quarter of baby boomers admitted to doing the same.
Nearly half of millennials are splurging on guilty pleasures, such as subscription streaming services or clothing, while others say they’ve spent funds on lottery and scratch tickets.
In the meantime, nearly a third of baby boomers say they don’t spend money on guilty pleasures at all, while the majority of those who do occasionally splurge shell out less than $100 a month for these non-essentials.
Still, it’s not all unsustainable spending for the younger demographic — Gen Z and millennials were actually the most likely to take actions to improve their financial wellness, at 83% and 84% respectively, compared to 72% of boomers.
Here are three key actions young North Americans are taking that baby boomers aren’t.
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Start Trading Today1. Loud budgeting
Gen Z isn’t trying to gatekeep their money hacks — in fact, they’ve taken several tips and tricks to their TikTok platforms and are more likely to share their budgeting habits with friends and family, compared to older generations.
Take 'loud budgeting,' for example, the recent viral trend that encourages folks to be more transparent about what they can’t afford when it’s not in budget.
Then there's cash-stuffing — a trendy name for the traditional 'envelope stuffing' hack — where you take your pay cheque in cash and store funds into various envelopes customized for your different spending and saving categories.
However, envelope stuffing can be done even easier with no-fee bank account or a low-fee option that allows you to open more than one account under your current banking plan. Rather than resorting to cash withdrawals every time you get paid, you can manage it all through easy-to-use mobile apps that will keep you on track to hitting your financial goals.
To set this online-only option up, it's best to use no-fee money accounts or bank accounts that offer multiple accounts for no or low-monthly fees. Good options include:
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Simplii Financial: This bank appeals to people who don't feel the need to enter a stuffy brick and mortar bank branch, and desire user-friendly apps, high interest savings accounts, and cash back. Think Gen-Z and millennials. The advantage is that Simplii Financial is one of the oldest online-only banks in Canada and it constistently tops best lists since it is constantly introducing new products and services designed with customer convenience in mind. This makes it easier than ever for customers to manage their finances without having to go into a physical location or wait long periods for transfers or deposits. Quite often, you can find a new client promotion, such as earning hundreds in cash back when you open a new account and set up direct deposit.
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EQ Bank: As an online-only bank in Canada, EQ Bank is popular because of its amazingly high-interest rates and no everyday banking fees. The Personal Account and Joint Savings Plus Account pay an outstanding everyday interest rate of 3.75% (just read the fine print as this means 2.25% earned on all deposits, plus another 1.50% when you set up direct deposit with your paycheque). There are no monthly fees or minimum balance, as well as free unlimited bill payments, Interac e-Transfers and more. You can also use these savings accounts to pay bills and move money instantly — just like a chequing account.
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BMO Performance Chequing Account: This is not a free account; however, with the $17.95 monthly fee this account does give you a wide range of options for managing your money, while developing better money habits. (Also, if you maintain a daily balance over $4,000, this monthly fee is waived.) For instance, you can create up to 20 accounts using the BMO Performance Chequing Account, as part of your family bundle. Plus this account gives unlimited transactions, unlimited Interac e-Transfers and the ease of choosing online banking or tapping into premium bank options, such as overdraft protection, access to bank drafts and money orders, to name a few. BMO will often run fantastic new customer promotions that offer cash bonuses.
2. Prioritizing their mental health and self care
Across generations, millennials were the most likely to say they prioritize their mental health over financial concerns. That’s not necessarily a bad thing.
Many young Americans are choosing to “soft save” instead of embracing hustle culture and experts say this can be a smart move, if executed responsibly. The goal is to save and spend with intention instead of feeling anxious about your money.
Nearly 50% of Gen Z and 42% of millennials also report spending on “self care,” compared to just 18% of boomers. It’s important to consider your mental and physical wellness while taking care of your finances as well, and that is something these generations are prioritizing.
Saving and spending with intention is a great way to gain proper money management skills that can lead to less financial anxiety. Instead of having one app for budgeting, another for savings, and a third for earning rewards, KOHO bundles all of these financial musts into a single app that doubles as a prepaid payment card. Its budgeting features allow you to easily reference which categories you spend most of your money in. Savings can be kick-started with RoundUp.
Unexpected vet bills don’t have to break the bank
Life with pets is unpredictable, but there are ways to prepare for the unexpected.
Fetch Insurance offers coverage for treatment of accidents, illnesses, prescriptions drugs, emergency care and more.
Plus, their optional wellness plan covers things like routine vet trips, grooming and training costs, if you want to give your pet the all-star treatment while you protect your bank account.
Get A Quote3. Seeking out financial advice
Young North Americans are also more likely to seek out financial advice from others. This can include friends and family and financial influencers they follow on social media — however, Gen Z and millennials are also more likely to work with professionals.
According to the survey, 10% of younger generations have hired an accountant or financial planner, roughly double the proportion of Gen X and baby boomers who reported doing the same.
Getting an extra pair of eyes on your financial situation, especially with an expert, can help you set reasonable expectations and work toward your money goals, whether that’s paying down your debts, reeling back your spending or saving for retirement.
Sources
1. Bread Financial: Modern consumers favor convenience and social media hype when spending (Dec 8, 2023)
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