Cultivating a Saving Mindset: A Guide for Gen Z

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I’ve been guilty of impulse shopping too. After a rough week, I often justify buying new clothes as a “reward” for getting through that difficult unit test or treating myself to a nice meal before a busy week. While small rewards can be great motivators if used sparingly, it can quickly turn into rewarding yourself every day, and that’s where the problem starts. Especially in our digital era where buying is as easy as pressing a few buttons, it can be tempting to make that flash sale purchase on Tiktok. Have you ever heard the phrase "Tiktok made me buy it"? Well with the rise of social media marketing and integrating ads into videos, Gen Z is susceptible to falling prey to the enticing products these creators market.

In our rapidly expanding consumer economy, it’s harder than ever to resist the temptation of buying that new limited-edition Hydro Flask, Pumpkin Spice Latte, or the latest pair of Jordans. These may seem like trivial purchases, but they quickly add up to $400 of monthly expenses. Some of you may have a job or parents to sustain these costs, but once we become financially independent, it’ll be tough to maintain this level of spending.

This habit of impulse buying is setting yourself up for toxic financial habits that can quickly lead to swiping that credit card once you're out of cash. In fact, these behaviors are why some adults, even those making six figures, find themselves living paycheck to paycheck. By unknowingly creating bad habits, you may be setting yourself up for lifestyle creep—when your spending increases as your income grows, leaving you unable to save and possibly sinking into debt.

The first step to breaking this habit is acknowledging it. The best way to do this is by tracking your expenses—yes, even the small purchases you don’t think twice about! You can create a simple budget on excel (GenZealth Excel budget coming soon!) or even using the notes app on your phone. I did this recently for a class and noticed I spent almost 80% of what I make a month. When I faced this harsh reality, I began thinking intentionally about each purchase and asked myself, is a Chipotle bowl worth a hour of work? Depends on the day, but most of the time it's a hard no. I encourage all of you guys to create a simple budget too and once you see the final number, it might shock you into realizing that your spending is out of control. So far I've cut my spending down to around 40% of my wage.

But don’t worry, you’re not alone. Building a saving mindset is key to breaking free from this cycle of impulse purchases and lifestyle creep. Developing smart financial habits early on can set you up for long-term success and financial independence. Here’s why starting to save early is so important and how you can begin taking control of your finances.

💡 Why Start Now?

1. Compound Growth: The earlier you start saving, the more time your money has to grow through compound interest—money making money!

2. Emergency Preparedness: Life is full of surprises, and having savings helps you stay afloat when the unexpected happens.

3. Financial Freedom: Starting small can lead to financial independence later on. Building good habits now means less stress about money in the future.

🚀 How to Start?

1. Set Goals: Whether it's $500 or $5,000, start with a goal that excites you.

2. Pay Yourself First: When you get income (from a part-time job, allowance, etc.), set aside a portion right away.

3. Budgeting is Key: Track where your money goes! Knowing your spending habits can help you save better.

4. Automate Your Savings: If possible, automate a portion of your income to go straight into a savings account—out of sight, out of mind!

🌱 It’s About the Habit:

It may be hard to give up immediate satisfaction for later gains, but the whole idea of budgeting is to slowly ease you into healthy habits. In fact, saving isn't just about the amount—it's about building a habit. Even if you can only save $10 a week, that's a powerful start! You may not see immediate results but once you zoom out, you are able to see how much you are able to save by simply cutting down no unnecessary purchases. With all these savings you have the ability to make it work for you, aka investing... which we will talk about in our next blog!

By starting early we have more time to reach our goals and more opportunities for financial freedom. So, let’s all get rich together! 💵✨