Generation Z adults prove to be more financially sophisticated than any previous generation was at their age, according to The 2022 Investopedia Financial Literacy Survey.
Dar es Salaam. Often perceived as extravagant, Generation Z has proven to be a demographic that spends considerable time and effort planning for their financial future.
This awareness stems from witnessing millennials struggle with massive debts and other financial challenges, prompting the younger generation to take a proactive approach to financial literacy and planning.
Despite their youthful age and tendency to juggle multiple jobs or freelance gigs, Gen Z has developed a remarkable knack for balancing spending on lifestyle luxuries and saving for long-term goals.
Their love for fashion, beauty products, technology, dining out and entertainment does not deter them from prioritising savings.
According to Independent financial adviser, Aloyce Makubi, Gen Z’s financial decisions are shaped by lessons learned from the struggles of older generations.
“They have seen first-hand the struggles of high student loans and credit card debt, which many millennials face. As a result, they are becoming more financially aware, even if they enjoy spending,” Makubi says.
Balancing savings and spending
Sonia Majid, a 24-year-old media personality, highlights her commitment to saving through informal savings groups like ‘vikoba’ and ‘merry-go-round’.
“I usually save money through ‘merry-go-round’ as well as in business, so that by the end of the year, I have enough savings,” she says.
When it comes to spending, Sonia admits that her focus is on essentials. “My spending mostly goes towards food and clothing. Buying clothes worth 200,000 shillings is very normal to me,” she adds.
Sonia also appreciates a workplace that feels homely and luxurious. “The office is where most of our lives happen, as we spend a lot of time there. I prefer an office environment that is classy and luxurious—it should feel like home,” she explains.
For Hamida Hafidhi, a 20-year-old content creator, saving is about leveraging secure options like fixed accounts.
“I save my money in a fixed account and explore different channels to invest in equipment for my content production,” she shares.
Hamida also invests in the Samia Infrastructure Bond, believing it’s a sound financial decision for someone her age.
“I think it’s the right thing to do with the money I earn from my content,” she adds.
Innovative approaches to investment
Frank Musa, a 24-year-old videographer, takes a slightly unconventional approach to saving, often investing in his friends’ small businesses.
“I don’t know much about saving, but I put my money into my friends’ ventures. When their businesses grow, so does my money,” Frank explains.
Frank prioritizes spending on experiences, fashion, and food.
“In this generation, everyone wants to look good. It doesn’t matter if you don’t travel much, but you must stay stylish and follow trends,” he says.
For 26-year-old Nuh Athumani, ‘merry-go-round’ savings are the most reliable option.
“I don’t trust my piggy bank because I might break it anytime, so I prefer saving through a merry-go-round,” he explains.
When it comes to spending, Nuh enjoys food and socializing with friends.
“If it’s not saving, then shopping and eating are what I enjoy the most,” he says.
Spending on self-development
Amrani Beka, a 25-year-old account verification specialist, invests in learning new skills and staying ahead in technology.
“I love learning new things to keep up with technological advancements. Each year, new devices are released, and I need to stay ahead,” Amrani shares.
His spending reflects his passion for home décor and gadgets.
“People want beautiful homes with great décor. If I don’t spend on that, I feel like I’m not treating myself well,” he says.
The Gen Z takeaway
Despite their reputation as spendthrifts, Generation Z is proving to be financially conscious, balancing their spending habits with a commitment to saving and investing.
Their approach reflects a forward-thinking mind-set that not only accommodates their lifestyle preferences but also prepares them for a more secure financial future.
