When it comes to Gen Zers, money's meant to be spent

Most people enter adulthood feeling broke and spending frugally. Not Gen Zers.

Spending by the youngest group of U.S. adults has been turbocharged by two once-in-a-generation drivers over the past year: decades-high inflation and a tight job market that has propelled strong wage growth, especially at entry levels. A boost in savings from forced inactivity at the height of the pandemic also helped.

“Gen Zs are not afraid to spend,” said Taylor Price, 22, who has gathered over 1 million followers across social media platforms like TikTok and Instagram by sharing advice on spending, saving and investing. This generation is focused on making money, rather than keeping it, she said.

Members of Gen Z are more likely than other generations to combine financial ambition with the desire to live comfortably, according to a survey of adults by Bank of America. Nearly half said that being able to afford material items was a motivator to achieving financial success. A separate survey conducted in December by financial-software company Intuit found that almost three in four Gen Zers would rather have a better quality of life than extra money in the bank.

Some of the turbocharged spending behavior by young adults can also be explained by wage growth. Although in dollar terms, younger people tend to earn less, workers ages 16 to 24 are the only group that’s seen pay gains consistently outpace the consumer price index throughout the pandemic.

— BLOOMBERG NEWS