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Gen Z, born roughly between 1997 and 2012, is coming of age in a time of financial volatility, with rising cost of living, economic uncertainty and the lingering impacts of the COVID-19 pandemic hanging over them as they enter early adulthood.
While you might think that people in their teens and 20s would value frivolous spending over saving, a 2024 study by the Transamerica Center for Retirement Studies found that Gen Z started saving for retirement at a median age of 20. This is significantly younger than prior generations, such as Baby Boomers, who began saving at age 35 on average. While older generations might have felt they needed to be earning a certain amount before they started saving, Gen Z knows that every little bit helps, and the biggest step in building Gen Z retirement savings is just getting started.
Seeing millennials and Gen X struggle with significant student loan debt and a weak job market has significantly impacted Gen Zers as they choose colleges and enter the job market. Financial security and building savings rank high on their list of priorities—there’s a lot the older generations can learn from Gen Z’s spending and savings habits.
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Growing up with social media around every corner has not always benefitted Gen Z, but one way they were positively impacted was by the accessibility of financial information. Personal finance TikTokers and podcasters have removed the mystery around saving and investing by breaking the information down and making it approachable for young people.
A growing number of apps are available that track spending, help users create budgets and minimize redundant subscriptions and unnecessary purchases. Other generations can benefit from exploring these as a way to get spending under control and find opportunities to save.
In past generations, it was common to be hired at a company right out of college and stay there through retirement. The job market is much more volatile these days, making Gen Z workers not want to put all their eggs in one basket for fear of losing them all.
Those in Gen Z understand the “side hustle” mentality and benefit from having multiple income streams, even when holding down a full-time job. If one income stream dries up, they aren’t left with nothing, as they can rely on their other earning opportunities to carry them until something better comes along.
Seeking out passive income is another way Gen Z savings is increasing, with affiliate marketing and content monetization leading the charge. Older generations can adopt similar strategies, such as writing e-books, renting out property or investing in dividend stocks. These require some initial time investment, but they are revenue streams that don’t require much attention once started.
Learn how to build a robust emergency fund with AAA's expert tips. Discover savings strategies to safeguard against unexpected expenses and secure your financial future.
Read moreWhile you can certainly find Gen Z influencers showing off their new handbags, outfits or sneakers, there’s also an increase in going green, thrifting and “no buy” months. Even with the availability of shopping at their fingertips, Gen Z is more concerned with overconsumption and environmental sustainability than prior generations. Thrifting and secondhand shopping are gaining popularity, rejecting “fast fashion” in favor of eco-friendly practices like clothing resale apps and clothing swap parties, and purchasing from companies focusing on sustainability.
Even if you aren’t interested in downloading apps to purchase second-hand clothes through the mail, you can likely find a thrift store offering pre-owned clothes for bargain prices. Garage sales and estate sales are other places to find used clothes. Or try a “no buy” month, pledging only to purchase clothes if something truly wears out (a “need”) instead of just buying to satisfy a “want.”
Many people have been using social media to pay down debt in recent years. You’ll find them sharing how much they owe in student loans, credit cards and other debt in a way that would have been taboo for prior generations. Putting this information out there for everyone to see can be a humbling experience. Still, it leads to accountability and can create a support network, helping people reach their goals faster.
Find out how “loud budgeting” can help you take control of your finances by being open with others about your financial goals.
Read moreSimilarly, you’ll see Gen Z more likely to discuss salaries, reducing the stigma around this topic and supporting a culture of pay transparency. A recent EduBirdie study found that 58% of Gen Zers refuse to apply for a job if the salary is not disclosed. This can benefit all workers in the long run, with many states now requiring pay transparency in job postings.
By challenging traditional financial norms and leveraging technology, Gen Z is setting a new standard for financial management that prioritizes early savings, income diversification and informed spending. Their proactive approach serves as a valuable model for other generations, demonstrating that economic stability isn’t about how much you earn but how strategically you manage what you have.
How is Gen Z approaching finances differently from previous generations?
Gen Z is starting to save for retirement much earlier than Baby Boomers or Gen X, with a median starting age of 20. They prioritize financial security and savings, influenced by witnessing other generations’ challenges with debt and employment.
What role does digital financial education play for Gen Z?
Social media platforms and digital tools have made financial education accessible. Finance-focused content creators and convenient budgeting apps help Gen Z learn and manage their money effectively, offering approachable guidance that anyone can use.
How does Gen Z view income streams?
They don’t rely on a single job. Instead, Gen Z embraces side hustles and multiple income sources—including freelance work, passive income such as affiliate marketing, and content monetization—to protect themselves against job market volatility.
What are Gen Z’s attitudes toward spending and sustainability?
Gen Z is more likely to choose thrifting, “no buy” months and eco-friendly brands over impulse shopping and fast fashion. Environmental sustainability and mindful consumption are rising priorities.
How does Gen Z handle financial transparency?
They are more open about debt and salaries, often sharing personal finance journeys and pay details on social media. This openness encourages accountability and helps normalize pay transparency, giving everyone better leverage in the job market.
What lessons can other generations learn from Gen Z’s financial habits?
Start saving early, leverage technology for money management, diversify income, spend with intention and foster transparency. These habits show that sustainable financial well-being is less about earnings and more about informed, strategic management.
Explore AAA Banking
AAA Banking offers flexible savings options, competitive rates and the trusted support you expect from AAA.
This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.
Annual Percentage Rate (APR)
We may change APRs, fees, and other Account terms in the future based on your experience with ACG Card Services and its affiliates as provided under the Cardmember Agreement and applicable law.
1Cash back can be redeemed in the form of a statement credit or ACH deposit ($25 cash back minimum redemption). Cash back is not earned on business related transactions or activities. You may not redeem cash back, and you will immediately lose all of your cash back, if your account is closed to future transactions (including, but not limited to, due to Program misuse, failure to pay, bankruptcy, or death). Cash back will expire at 11:00 p.m. Central Time on the last day of the calendar quarter that is five (5) years from the date on which they are earned. Account must be open and in good standing to earn and redeem rewards and benefits. Upon approval, please refer to your Cardmember Agreement for additional information. Cash back is earned on eligible net purchases. Net purchases are purchases minus credits and returns. Not all transactions are eligible to earn cash back, such as Advances, Balance Transfers, and Convenience Checks and other advance transactions as defined in the Cardmember Agreement, as well as interest charges and fees do not qualify. U.S. Bank cannot control how merchants classify their business or transactions and reserves the right to determine which Purchases will qualify in which category. Earn 2% per dollar for qualifying net purchases made with the card through any participating AAA Club when AAA is the merchant of record, on qualifying net insurance purchases (MCC = 6300) and at eligible retail travel merchants. AAA Clubs located in Northern California, Nevada and Utah are not participating AAA Clubs and purchases made at those clubs will not qualify for 2%. Earn 4% per dollar for qualifying net purchases on AAA purchases, travel and insurance for your first 6 months up to $6,000. After that, earn cash back in the standard 2% category. Foreign Transaction Fee: None.
2 Benefits are subject to terms, conditions, and limitations on the amount of coverage. Travel and Emergency Assistance Services help in coordinating medical, legal and travel services while away from home. Rental Collision Damage Waiver coverage and peace of mind for damage due to collision or theft of most rental cars. Certain terms and conditions apply. Please refer to your Visa Guide to Benefits for details
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†Annual Percentage Rate (APR). Auto Loans. Rates and terms effective as of 3/7/2025. APR is accurate as of 3/7/2025. Advertised rates and terms are subject to change without prior notice. Additional terms and restrictions may apply. Other loan rates available. Subject to borrower qualification. Advertised rate includes a 0.25% discount when you set up automatic payments from any checking or savings account. Rate is variable. Offer valid on personal vehicle loans only. Criteria to receive the stated APR: Loan term 48 months or less new or used, model years 2019 – 2025 with a credit score of 740 or higher based on the Vantage scoring model. Buyer is responsible for all state or local fees. AAA Banking uses a managed credit program, and final APR is dependent on your credit score. An auto loan with an APR of 5.24% for a $20,000 loan at a term of 48 months, your estimated monthly payment would be $463. An auto loan with an APR of 5.49% for a $20,000 loan at a term of 48 months, your estimated payment would be $465. Private party sales will not be financed. Auto loans are offered by Grasshopper Bank, N.A. Member FDIC.
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The figures entered on the input page of this calculator are for hypothetical purposes only. You should enter figures that are appropriate to your individual situation. The results provided by this calculator are also intended for illustrative purposes only and accuracy is not guaranteed. This calculator is not intended to offer any tax, legal, financial or investment advice and does not assure the availability of or your eligibility for any specific product offered, nor does this calculator predict or guarantee the actual results of any product. The terms and conditions of products offered will differ and may affect the results of the calculator. Please consult with qualified professionals to discuss your situation. The final APR may differ from the APR in the above results due to additional fees that may be applicable.
3Triple Advantage Savings Annual Percentage Yield (APY) is accurate as of 4/1/2025. The minimum amount to open an account is $100.00. Triple Advantage Savings Account Holders can earn the following Annual Percentage Yield (APY): 3.50% APY with Eligible AAA Membership and 3.15% APY without eligible AAA membership.* Deposit products are offered by Grasshopper Bank, N.A. Member FDIC.
4Triple Advantage Savings account holders with a monthly average balance of $25,000.00 or greater receive free outgoing domestic wire transfers. Triple Advantage Savings account holders with a monthly average balance of $24,999.99 or less will be charged a $10 fee for each domestic outgoing wire transfer.
5Triple Advantage Certificate of Deposit (CD) Annual Percentage Yield (APY) is accurate as of 4/14/2025. The minimum deposit to open an account is $500. 4.25% APY applies to a 6-month CD with balances of $500.00 and up. 4.20% APY applies to a 9-month CD with balances of $500.00 and up. 4.10% APY applies to a 12-month CD with balances of $500.00 and up. 3.95% APY applies to an 18-month CD with balances of $500.00 and up. 3.75% APY applies to a 24-month CD with balances of $500.00 and up. 3.50% APY applies to a 36, 48, and 60-month CD with balances of $500.00 and up. CDs are opened and interest begins on the day the funding deposit is received. The interest rate and APY are fixed for the term of the CD. The APY assumes interest remains on deposit until maturity. Withdrawal of interest before maturity will reduce earnings. A penalty may be imposed for early withdrawal. Fees may reduce earnings on the account. Deposit products are offered by Grasshopper Bank, N.A. Member FDIC.
Early Withdrawal Penalties
An early withdrawal penalty will apply if you withdraw funds before the maturity date. For terms of 6 to 12 months, the penalty is 90 days of interest. For terms of 13 to 60 months, the penalty is 180 days of interest. In accordance with Regulation D, a minimum penalty of 7 days’ simple interest will apply to withdrawals made within 6 days of deposit or within 6 days of a previous withdrawal.
6Triple Advantage Checking Annual Percentage Yield (APY) is accurate as of 4/1/2025. The minimum amount to open an account is $100.00. Triple Advantage Checking Account Holders can earn the following Annual Percentage Yield (APY): 1.00% APY with eligible AAA membership and 0.75% APY without eligible AAA membership.* Deposit products are offered by Grasshopper Bank, N.A. Member FDIC.
7Cash Back rewards offer 1.00% cash back on all qualified purchases made by eligible Triple Advantage Checking account holders with an eligible AAA membership.* To qualify for cash back, Triple Advantage Checking account holders must meet all requirements and a transaction must be deemed as a qualified purchase.
Qualified purchases are signature-based purchases made with a AAA Banking debit card from a Triple Advantage Checking Account. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and how the transaction is transmitted to AAA Banking at the time of processing. AAA Banking reserves the right to determine if a transaction was a qualified purchase, and to establish additional types of qualified purchases that could be made available in a variety of ways. Any goods or services purchased with the debit card that are returned or otherwise credited to the account are not qualified purchases. Unlawful purchases and purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, travelers cheques, gift cards, cryptocurrency, casino chips, peer-to-peer payments, prepaid debit cards, account openings, loan payments, or other cash equivalents) made with a debit card are not qualified purchases. Documentation may be required to validate that certain purchases are qualified purchases. If you or AAA Banking closes the account for any reason before the end of the statement cycle, you will forfeit all rewards accrued through your linked debit card during that statement cycle. The AAA Banking Visa® debit card is issued by Grasshopper Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa is accepted.
Important Tax Information
The value of this reward may constitute taxable income and may be reported to the Internal Revenue Service as miscellaneous income to the first signer on the account, in the year received, as required by applicable law. Offer is limited to clients who are citizens of the United States that furnish or have a valid Form W-9 on file and the account must not be subject to backup withholding.You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. Please consult your tax adviser, as AAA Banking does not provide tax advice.
*Eligible AAA Membership Definition: you must be a "Basic," "Plus," or "Premier" member of AAA - The Auto Club Group (ACG). ACG serves households in Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, New York, North Carolina, North Dakota, South Carolina, Tennessee and Wisconsin. Applicants must be 18+ and a U.S. resident. Other AAA memberships are not eligible.
AAA-Member Verification & Product Eligibility
By applying for a AAA Banking deposit account, you acknowledge and agree that if you select a AAA-member product, your AAA membership status with Auto Club Group (ACG) will be validated at the time of account opening and periodically thereafter. If your AAA membership cannot be validated or your membership status changes, your account may be moved to a non-member product with different terms, including but not limited to a lower Annual Percentage Yield (APY) and the removal of other AAA member-only benefits. If this occurs, you will receive a notification regarding the change in the product and applicable terms. If you believe your AAA Membership status was incorrectly validated or that you have been placed in the incorrect product, please contact us to review and correct your status.
Products are offered by Grasshopper Bank, N.A.. Equal Credit Opportunity Lender.
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