Pathward Research Reveals Gen Z’s Extended Path to Financial Independence and Their Increasing Reliance on Digital Financial Tools

Despite a strong reliance on parents at this life stage, Gen Z has an optimistic outlook on long-term financial prospects.

SIOUX FALLS, S.D.--(BUSINESS WIRE)-- Pathward^®, N.A., a national bank focused on financial access, today announced the results of research it conducted in partnership with Mastercard on financial attitudes and behaviors of Gen Z. The report, “From Safety Net to Solo: A Data-Driven Look at Gen Z’s Financial Journey,” illustrates the steps in their migration to financial independence. This generation faces high costs as they navigate their early financial lives but are largely optimistic about their financial future.

Pathward published the results of research it conducted in partnership with Mastercard on financial attitudes and behaviors of Gen Z.

According to the survey, only 37% of Gen Z reports being mostly or completely independent from their parents with 63% of 23 and 24 year olds relying on their parents for some portion of their expenses. Many rely on their parents to cover monthly expenses, which is likely a result of many Gen Zers transitioning to full-time employment and navigating today’s high cost of essentials like groceries, rent and gas. Even as they transition away from the financial support of their parents, many respondents indicated that they take a conservative or moderate approach to risk tolerance with their finances.

Despite the somewhat slow transition to financial independence and a generally cautious approach to risk, Gen Z has an optimistic outlook on their long-term financial prospects. Regardless of whether they are in high school, college, post-college or pursuing an alternative to college, more than half (55%) indicated the belief that they are extremely or very likely to reach their financial goals. Conversely, 9% believe they are not likely to achieve their financial goals.

“Gen Z knows where they want to go financially, and many members of this generation are optimistic that they can get there,” said Pathward President Anthony Sharett. “Understanding Gen Z’s outlook on the future and their financial priorities is essential for financial institutions looking to create solutions that align with their needs today and tomorrow.”

Gen Z Takes a Diversified Approach to Financial Tools

Even as a plethora of payment tools have been introduced to consumers, Gen Z primarily uses more traditional payment methods like debit cards (34%) and cash and checks (25%). Looking a bit closer at different cohorts within Gen Z, however, there is a clear migration to credit and digital payments (digital wallets, payment apps) that correlates with increases in age and education. While the older, more educated cohorts are not abandoning traditional payment tools, they are capitalizing on all the benefits that today’s payment options offer.

Convenience is the clear driver of digital wallet and mobile app usage, with mobile apps viewed as the most flexible payment vehicle cohort. Usage patterns across these digital payment tools vary across Gen Z age groups. While digital payment options are important to Gen Z, when asked which payment vehicle they would choose if they could only have one, 40% of respondents—including 46% of college-aged Gen Zers and 42% of Gen Zers pursuing college alternatives—selected the traditional debit card.

“Gen Z is the next generation of financial decision-makers, and their behaviors today are shaping the future of how money moves,” said Will Sowell, Pathward Divisional President of Partner Solutions. “As they transition through life stages, their expectations for easy, secure transactions set the tone for product design, education and delivery.”

Our electronic book, “From Safety Net to Solo: A Data-Driven Look at Gen Z’s Financial Journey”, provides results from an online survey of 750 participants. The study focused on Gen Z respondents (ages 18-24), segmented into four life stages: Late High School, College, College Alternative, and Post College. It explores consumer profiles and self-perceptions, key influencers, top financial products owned and used, employment status, financial independence, income levels, risk tolerance, and sources of financial advice. Understanding these patterns can help payment providers and merchants drive better targeting, reach the right audience and accept digital wallets in top tier spend categories. Read “From Safety Net to Solo: A Data-Driven Look at Gen Z’s Financial Journey” on Pathward.com to learn more.

About Pathward^®

Pathward^®, N.A., a national bank, is a subsidiary of Pathward Financial, Inc. (Nasdaq: CASH). Pathward is focused on financial access and strives to increase financial availability, choice and opportunity across our Partner Solutions and Commercial Finance business lines. The strategic business lines provide support to individuals and businesses. Learn more at Pathward.com.

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Media contact:

Courtney Heidelberg

605.291.7044

mediarelations@pathward.com

Source: Pathward Financial, Inc.