Business & Startups

The Ultimate Financial Planning Guide For Gen Z – AllTopStartups

Gen Z is the current generation of young people born between 1997 and 2012. In 2023, the oldest of this generation will be 26 years, just completing college, getting married, and starting families. This tender age is the best time to start saving for investment and retirement, though only 39% of adults do so in their 20s. So, if you’re a Gen Z, take the tips seriously and be different from the majority.

Consult a financial advisor

Proper financial planning requires considerable expertise. The financial world is dynamic, with new trends emerging now and then. Although you may have learned the basics of financial projections in school, it pays to consult a professional to assess your individual situation and help you craft a feasible plan considering the prevailing economics.

Advisors will help you outline reasonable financial goals and typical risks endangering these. They’ll also help you formulate suitable strategies to mitigate these risks. Besides, they’ll advise on tax-efficient saving solutions and suggest relevant investment products.

When looking for a financial advisor, it’d help to ascertain their professional qualifications and experience level. One that has served numerous clients for several years and achieved positive results is best placed to offer meaningful advice.

Stick to a budget

Budgeting is fundamental if you desire financial success. Recent surveys show 80% of Americans budgeted as of 2020, an increase from 68% in 2019. Follow suit and set the pace for your financial success. Ideally, you sum up your income from various streams and allot a particular amount for expenses like rent, food, entertainment, transport, taxes, insurance, and healthcare. The expenses should, in no way, exceed the revenue. If it does, you might want to trim spending on non-essential bits like entertainment and partying.

Alternatively, get an income-generating side hustle to supplement
your salary. On the same note, it’d help to avoid lifestyle creep, where you adjust your lifestyle upwards as your income increases. This habit has the adverse effect of living paycheck-to-paycheck, which is detrimental to your financial future. Aim at maintaining an affordable lifestyle regardless of how much more you earn.

Stash some amount for emergencies

Life is full of uncertainties, and some events may require more cash than you’d probably planned. Some unannounced emergencies include falling sick, car accidents, workplace injuries, sudden inflation, job loss, major home repairs after natural disasters like floods, funerals, and unexpected travel.

To cushion yourself against such eventualities, you’d better start an emergency fund. As a general rule of thumb, have three to six months’ worth of living expenses. But you can still be more aggressive and stash enough money, equivalent to even one year of expenses.

Keep the money in a savings account for quick access whenever needed, given that emergencies come unannounced. Most importantly, exercise discipline so that you don’t use the cash for non-emergency expenses like taking a trip abroad.

Diversify your investments

Don’t keep all your eggs in one basket. When one investment fails, you’ll have other income streams to depend on. Besides your nine-to-five job, you may want to consider these passive income streams:

  • Dividend stocks
  • Exchange-traded funds
  • Rental property
  • Affiliate marketing
  • Creating a mobile or web app
  • Selling online courses
  • Advertising on your car
  • Flipping real estate property

Diversifying your portfolio cushions you against economic downturns in select industries, which is inevitable once in a while.

Take advantage of financial apps

Gen Z is synonymous with tech savviness. Currently, there’s an app for virtually everything, including financial planning. Installing a budgeting app helps you keep track of your expenses so that you don’t break your rules too often.
Daily reminders of your spending habits help you stay alert and focused on your financial goals. With artificial intelligence (AI) capabilities, such apps can also analyse your spending versus income and suggest how much you should save.

Save for retirement

If you’re around 26 years now, and the average retirement age in the U.S. is 63, you have about 37 years to save for your life’s latter days. Suppose you earn USD$100,000 annually and follow the 15% retirement saving recommendation. In that case, you’ll have accumulated USD$555,000, plus interest, by the time you retire, which is far above the USD$65,000 median retirement savings for American households.

The good thing about starting early is that you save only a little monthly without undue pressure. If you start saving for retirement in your 40s or 50s, you may have to commit a greater percentage of your salary to meet your targets.


As a Gen Z, don’t ever imagine you have a lot of time ahead before you begin getting serious with financial planning and investment. The earlier you organize your finances, the higher your chances of achieving optimum financial health. If you’re not sure how to put things in order, it’d be best to consult a financial advisor to assess your economic standing and help you craft and pursue reasonable budgetary objectives.

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