Gen Z's Top 5 Financial Goals and How You Can Help

Getting in front of Gen Z to talk about money is something that hits close to home for many community bankers, whether they’re working to expand their customer base or talking to their own kids.

This group is already having a big impact on the banking sector. The Gen Z population—ranging from ages 12 to 27—now makes up nearly 20% of the U.S. population and boasts more than $360 billion in spending power, according to research by Adrenaline. 

In addition, nearly half already have some type of account with a bank, credit union or neobank, and they are forecast to continue opening new accounts at a rate of roughly 4 million per year in 2025 and 2026.

Despite a desire to court younger customers, bankers are still trying to figure out how and where to connect with members of this generation, who seem to live much of their life in the virtual realm. 

“This generation are such good multitaskers that you need to provide them that information quickly,” says Scott Auen, executive vice president of retail lending and CRA officer at $1.5 billion-asset Cornerstone Bank in Worcester, Mass. “They want as much as they can without having to go to other screens. It has to be very accessible.” 

Bankers also are focusing on exactly what to talk about with their youngest customers. Here are some of the financial goals on Gen Z’s minds.

Gen Z financial goal #1: Building credit and weighing credit card options

Many Gen Zers are doing a good job of building credit. Experian says credit scores for this generation are on the rise, with an average FICO score of 680—not far below the national average of 715. At the same time, others in this generation have no idea what a FICO score is or why it’s important. 

“There’s a lot of misinformation out there,” says Leslie D. Crabill, executive vice president and director of wealth and investments at $843 million‑asset Bank of Charles Town (BCT) in Charles Town, W.Va. Often, credit card companies target Gen Z students, and then once they get one card, they get inundated with offers for additional cards and balance transfers. 

Crabill recently had a meeting with a Gen Z client who had inherited money from his grandparents. He was carrying $5,000 in credit card debt and paying 20% in interest on the balance, because he thought he needed to do that to build credit. Especially in situations like this, she notes, education is important, because it can be hard to figure out what the truth is.

Possibly the best way to get in front of Gen Z with information like this is social media. In some cases, that might be posing a simple question, such as, “Do you know how to use credit cards to improve your credit score?” 

“As a community bank, we should be doing more little tidbits like that that are going to be beneficial,” says Crabill. A simple social media post can then link back to the bank’s resource page or give information on how to schedule a consultation.

“It’s important for us as bankers to explain how the credit card will help to build credit,” agrees Michele Roark, director of community banking sales and service at $27.1 billion-asset United Community in Greenville, S.C. Among its credit card products, United Community offers two secured credit card options: a secured card and a max cash secured card. With both card options, the customer also opens a savings account that acts as collateral for their credit card account. The bank also offers a CD-secured loan that helps to build credit. The borrower makes a monthly payment at a very minimal interest rate and then also receives the interest rate proceeds from the CD at the end of the loan.

Gen Z financial goal #2: Paying for college

Although student loans tend to be dominated by private student loan lenders and bigger banks, one of the key ways to capture this business is by offering a seamless digital experience. 

“The process needs to be [available] online with digital submission, have a quick approval process, and have an intuitive loan management portal,” says Frank Buonomo, senior vice president and chief marketing and communications officer at $1 billion-asset Brentwood Bank in Bethel Park, Pa. “With the continued rising cost of college, community banks need to be sure they have the right employees and financial partners who can help students and parents navigate repayment strategies and continue to be supportive post-graduation, adding that personal touch, which community banks do best.”

Setting up a 529 investment account is an attractive option for many college hopefuls because money both goes in and comes out tax-free if funds are used for school-related expenses. 

In addition, the IRS recently passed a rule that any funds left in a 529 can be converted to a Roth account for the beneficiary or the student, with a lifetime limit of $35,000 per beneficiary—an option if your community bank offers investment services. 

“That really gives a 529 more flexibility,” says Crabill. A Roth conversion also opens the door for an advisor to talk to the Gen Z customer about financial planning, investing for retirement and other financial goals. 

A Roth IRA is another way parents or future students can save for college. Money that is put into a Roth can be taken out without penalty prior to age 59 1/2, which creates flexibility. 

Offering 529 plans with nominal fees, no initial deposit requirements and easy-to-use online tools can make these programs more accessible to the parents of younger Gen Zers or to older Gen Z members, notes Buonomo. 

“One of the most important pieces here is the education component,” he says, “and working to be sure your customers understand the benefits and how early saving can reduce reliance on student loans.”

Gen Z financial goal #3: Managing debt

Gen Z is embracing myriad credit options, from traditional credit cards to buy now, pay later (BNPL) options and “click and buy” mobile commerce that makes impulse buying easier than ever. 

According to Experian, the average Gen Z consumer is seeing their debt grow, with average balances as of 2023 including $3,262 in credit card debt, $20,305 in auto loans and $21,574 in student loans.

Adding to their debt woes, Gen Z is growing up in a “subscription economy” where consumers use their credit card or direct payment to buy all kinds of things that are charged on a recurring basis, from software and streaming services to membership fees. “Those bills just kind of blindside your bank account without any sort of visibility or ability to control from the consumer side,” says Jordan Mackler, CEO and cofounder of ScribeUp, a subscription management service for bank customers. 

According to Mackler, the average person now has between 10 and 20 monthly bills, and Gen Z skews on the higher end of that because they tend to embrace more of the productivity tools and experiences tied to subscription fees. ScribeUp partners with financial institutions to offer a subscription management tool that is embedded within a bank’s mobile and desktop banking experiences. 

When bankers talk with Gen Z customers about credit card debt, customers typically want to go straight to refinance. However, they may not have built credit yet, so a loan consolidation won’t typically be an option. Again, it comes back to educating customers.

“There are different exercises that we do when we're out at events, such as freshman move-in day, to show students what that credit card debt looks like,” Roark says.

For example: If you put a pizza on your credit card, what is that pizza really costing you, and is it worth it? Another example: If you have $5,000 in credit card debt at a 25% interest rate, your payments could be about $120 for 100 months. But if you’re able to pay $140 a month instead, you can reduce your term to 67 months and save over $2,500 in interest payments.

Gen Z financial goal #4: Buying their first house

Community banks that offer residential loan options have a variety of products and resources for first-time homebuyers. The big challenge is getting that information in front of potential customers. 

“I think they rely on the news, and they get overwhelmed with hearing that they're locked out of the market, and that is not necessarily true,” says Auen. “It's just being informed of what options are available. And that's where social media and our financial literacy work [are] going to play a big part.”

Many banks start with the educational piece, such as building up the resources available on their websites and offering home-buying seminars throughout the year. Cornerstone Bank has made a point to change its approach to appeal to younger customers. Instead of hosting seminars at a branch, the community bank tries to find more engaging locations to make it more informal and fun, such as a brewery or restaurant.

Cornerstone Bank is also in the process of developing short educational videos that it plans to start posting on social media by the end of the year. The bank is relying on younger viewers to share information, rather than make it seem like “dad” or “mom” is giving them a lecture on mortgages, adds Auen.

Gen Z financial goal #5: Saving for retirement and other long-term financial goals

Gen Zers are thinking about their financial futures earlier than prior generations. According to a 2024 Planning and Progress study conducted by Northwestern Mutual, the average adult Gen Zer starts saving for retirement at age 22. 

Yet, bankers agree that getting in front of the Gen Z audience is challenging. This is a group that might have 10,000 unopened emails. Because of this, notes Crabill, you can’t send them an email. You have to find other ways to get in front of them—on their mobile devices, on the social media platforms they use and in person. Social media posts have to be snappy and eye-catching. Posts should direct them to information about, for example, how employer 401(k) contribution matching programs work or why compound interest is so powerful.

One way BCT is working to reach Gen Z clients is by starting with its own employees. The wealth management department took on the job of educating new employees through its Wealth Wednesday, which is a “lunch and learn” program where they discuss things like how a 401(k) plan works. The hope, says Crabill, is that employees will take that knowledge and share it with their friends and others in their peer group.