Zennials and the art of money maintenance — why your child is more financially confident than you

Financial confidence can mean different things to different people, but Sanlam defines it as a level of assurance and belief in your ability to manage and navigate your financial life effectively.

According to the Sanlam Financial Confidence Index, zennials – Generation Z and millennials, born between 1992 and 2002 – show higher levels of financial confidence than Generation X and boomers.

Sanam Naran, a registered psychologist, says social media plays a big role, offering succinct and engaging finance-related content. “Additionally, money is no longer such a taboo topic; families and friends may be more open to discussing finances, fostering a healthy and informed dialogue,” she says.

Dr Mavis Mazhura, a behavioural finance expert, explains some of the positive money patterns younger generations are showing:

Increased financial literacy: US research indicates that 73% of millennials and 55% of Gen Zers grew up in families that discussed money, compared with 41% of baby boomers. Mazhura says open conversations about money can improve financial literacy in younger generations. According to Sanlam, the “f-word” could well be “finances” given the reluctance of older generations to discuss finances openly. “We need to keep normalising discussing the ‘f-word’ as in finances at home,” Mazhura says.

The digital divide: As digital natives, members of Gen Z, also known as zoomers, leverage technology to manage finances effectively. Mazhura says their entrepreneurial spirit and access to diverse role models through social media further bolster their self-assurance and drive. 

Saving and investing early: Millennials and zoomers are less likely to start with debt. Many benefit from parent-initiated investments, earning some the nickname “trust fund babies”. Starting to save and invest early has become a cornerstone of building wealth for these generations.

Focus on debt management: According to DebtBusters’ latest report, unsecured debt is, on average, 29% higher in 2024 than it was in 2016. For those taking home more than R35,000 a month, it is 60% higher. However, younger generations, who have been exposed to more financial literacy initiatives and perhaps because of their awareness of their parents’ debt dependence, are increasingly aware of the importance of managing debt. Many avoid debt entirely or prioritise paying off high-interest loans quickly.

Emphasis on financial independence: Younger people are drawn to the Fire (financial independence, retire early) movement, focusing on aggressive saving and investing strategies to achieve financial independence earlier in life. This is a far cry from the older generations who, recent studies show, are more likely to retire in their eighties.

Kanyisa Mkhize, chief executive of Sanlam Corporate, says internal member data indicates that although 65 remains the official retirement age, only 25% of South Africans can afford to retire at the time.

The Financial Confidence Index also showed zoomers are more optimistic and open to advice, and more satisfied with their lifestyles than other generations – all of which adds to their overall confidence. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.