Helping Gen Z build financial confidence

What parents of teenagers and young adults can do to help their kids feel more secure about their finances — and their futures.

As a parent, you want to do everything you can to teach your kids about money and help them build financial confidence from a young age. This essential education and support can also continue through first jobs and other money milestones. Ideally, you’re laying a foundation that will last a lifetime.

But for parents of Generation Z, it can help to know what you’re up against. These teens and young adults born between 1997 and 2012 have been coming of age during tumultuous economic times, and that appears to be taking a toll: In a recent survey, more than one in four members of Gen Z said they aren’t confident in their financial knowledge and skills — the lowest level of confidence of any generation. Another report on the oldest members of Gen Z found that nearly 40% of these young adults fear making the wrong financial choices.

For parents of Gen Z kids, it may be painful to watch your children struggle and fret. To help them develop positive money habits, financial educators suggest this approach:

Keep the lessons simple

“When it comes to financial matters, we often feel that things have to be complex to be effective,” says Kevin Matthews II, the founder of financial education firm BuildingBread. Unfortunately, the idea that complexity equals effectiveness can keep parents from tackling important money conversations. If you feel like your own financial knowledge isn’t “sophisticated” enough, you may hesitate to teach your children, Matthews notes. Rest assured, he adds, that you have lessons to pass on.

“When you keep things simple, you can repeat the results,” Matthews says, “and when you have repeated results, you make progress.”

Share how you manage money

The youngest members of Gen Z will be celebrating their 12th birthday in 2024. At this age, teaching your kids about money is a bit like teaching them how to cook or change the oil in your car: They learn when you ask them to help.

Nadia Vanderhall, a financial educator with the Brands and Bands Strategy Group, recalls her parents taking this approach. “I remember learning about balancing a checkbook by working with my parents when that was a thing,” she says.

Even if you no longer balance a checkbook, Vanderhall says, “parents can show their kids how they pay bills, how they plan for spending, and even how they invest in the stock market.” These conversations about day-to-day money management can also give you the opportunity to talk more deeply about money.

Let them take the wheel

Even from a young age, kids can learn by making their own decisions about how to spend, save and donate their money. In addition to allowances, they may have cash from birthday gifts or the jobs like babysitting or mowing lawns in the neighborhood.

As your Gen Z kids move through their teen years, learning by doing — with guardrails that you set — can be highly effective. “The older your kids are, the more you should lean into the experiential approach,” Matthews says.

That could mean joint bank accounts, or a debit card like Greenlight. You can fund the card from your bank account, set limits on how much and where your teen spends money, and see what they’re doing. This allows your child to learn how to manage their money with light supervision.

With older teens, a joint investment account can teach them the ins-and-outs of investing with your help. “This approach gives the parents transparency to help coach and teach where needed and point out different lessons when things arise,” Matthews says. “When they're ready, you can drop off the account and let them manage it on their own.”

Harness social media for teaching

It’s common for parents to lament how much time Gen Z spends online, but Vanderhall sees social media as an opportunity for financial education. “Search social media for topics and walk your kids through how that advice matches up to your own budgeting and spending decisions as well as your values,” she says. “Comparing while giving commentary is what's going to make it click.”

Another benefit is that you can teach your children how to spot content that may not be true. Pointing out dubious money claims can improve their financial literacy — and their media literacy. “It allows your kids to not just scroll, but know,” Vanderhall says.

Help set realistic expectations

Gen Z’s money stress may be a rational response to economic turbulence during their formative years. But the oldest members of this generation may also be worrying needlessly because they are comparing themselves to others.

“Oftentimes, when you're dealing with financial anxiety, it is because you're holding yourself to an unrealistic standard,” Matthews says. Remind your children that “finance isn't about hitting arbitrary milestones but about making the most out of the resources and situation they're in,” he says.

Vanderhall suggests talking about your own early struggles. “Parents should walk their kids through some of the similar situations that they've dealt with and how they would handle it differently now,” she says.

Resetting unrealistic expectations may also mean letting go of yours. Pew Research reports that fewer than half of young adults between 18 and 34 are entirely financially independent from their parents. Accept that your Gen Z children may need a longer runway before they launch. “Financial success has to be redefined from generation to generation and person to person,” Matthews says.

The bottom line is that worrying about your children is part of parenting. While there’s no way to shield your Gen Z kids from the realities of young adulthood, you can help them learn to navigate financial challenges. And it all starts with transparency. “Talk with your children about your finances and theirs as early as possible,” Vanderhall says. “When you know what could be coming up ahead, you can find a better route and reduce your stress.”

Get more information on bank accounts, and which options can help start your kids financial future off on the right foot.