this is how young people manage their finances

While the use of cash as a means of payment has been gradually reduced in recent years, Generation Z, those born in the late 1990s and early 2000s, seem to have reclaimed it as the best tool to control his finances.

According to the survey of the personal finance platform Credit Karma, collected by Efe, 45% of Generation Z young people are digital natives, prefer cash for their daily purchases, a much higher percentage than in the general population. In addition, 33% feel they have more control over their finances if they operate with cash and 25% say they do not want to accumulate debt.

The national survey on the use of cash recently published by the Bank of Spain also goes in this direction, where 60.3% of the population between the ages of 18 and 24 have cash as their preferred means of payment.

A study by the Center for Generational Kinetics explains that the economic crisis derived from the health pandemic has had a direct impact on young people, who have also witnessed the financial difficulties of family and friends.

According to the report, 34% of consumers aged 13 to 25 were negatively affected in their personal savings, 36% in their ability to earn income and 39% in their ability to consume. 27% struggled to save for education and 29% to build an emergency fund.

All these issues have aroused great concern among the youngest to limit risk, know the rates and costs associated with means of payment and, ultimately, have greater control of their personal finances.

64% say they don’t have a bank card

In this context, having “rediscovered” cash as a “useful, reliable and effective” tool for understanding and optimizing one’s financial health. Indeed, 64% say they do not have a bank card.

Impact of social networks

There are many youth-with-money initiatives that have gone viral across the network lately. One of the most shared has been what is called “savings in an envelope”. This measure consists of tracking expenses by allocating a fixed amount of money into several envelopes dedicated to regular expenses and long-term goals.

One example is Laura Castellanos, whose videos on the @abundantgains tiktok account are followed by more than 11 million people.

Since the end of the 1970s, various authors, including Elizabeth Hirschman or Richard Feinbergstudied what is calledcashless item” or “cashless item”the idea that consumers tend to buy more products and pay higher amounts when paying cashless, since there is no physical sensation of giving up tangible money.

For many experts, the sentiment associated with cash payment serves as a natural tool to make payments “more visible and aware” and to improve, at the same time, the management of personal finances, against those who defend digital payments and the near disappearance. cash.

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