Financial wellness is defined as the ability to live within your means and manage your money in a way that gives you peace of mind. It includes balancing your income and expenses, staying out of debt, saving for the future, and understanding your emotions as they relate to money.
Defined as those born between 1997 and 2012, Gen Z make up approximately 30% of the world’s population. Gen Z is known for its unique characteristics, including its digital literacy, tech-savvy nature, and strong desire for authenticity.
Having joined the workforce recently, this generation are proving to be more influential as their buying power and disposable income rapidly increases thus unsettling brands and business strategies. However, they are notorious for not being very focused on many things long term such as preparing and saving for their future. They are known to live for here and now and not for tomorrow. This is a generation that would rather save for the most expensive phone or trip other than saving to achieve financial security in the future.
In a recent CFA Institute survey, the report analysed spending habits of this generation in 13 emerging and developed markets including Kenya. Across all the emerging markets surveyed in this research, almost two-thirds of Gen Zs (62 per cent) say they do not have a bank account – be it a personal bank account or one opened by their parents. In Kenya, only 45 per cent of Gen Zs have access to bank accounts, but 31 per cent have a mobile wallet, read the report.
With the recent cost of living sky rocketing, Gen Z are struggling to keep up their credit scores and paying an increasing amount of disposable income servicing their debts. Availability and easy access of digital loans has been one of the reasons this generation is falling into debt. It is important that Gen Z achieves financial wellness to avoid a future of poverty-stricken generation. For us to achieve this, it is important to first educate them on financial literacy.
Financial literacy enhances you with the skills needed to make money work for you. It is through financial literacy that one is able to know different platforms to save money, control one’s spending and live within your means.
Insurance has saving and investment tools that help one achieve their financial goal as well as ensuring you have readily available funds. Money market funds is one of the most ideal funds for Gen Z to start their saving journey. They are low risk funds that ensures your money is safe and one can withdraw whenever they have an emergency. The CIC money market fund allows you make an initial investment of KShs.5,000 and monthly top up of KShs.1,000.
It is an individual responsibility to ensure that we achieve financial wellness for the sake of our futures. Self-control, discipline, budgeting, and living within our means, is the sure way of ensuring financial security. As players in the financial sector, we must offer financial literacy on financial planning and create awareness of the different tools one can use to save.
