It is almost impossible that, in the past couple of years, scrolling through your TikTok “For You” page or on your Instagram feed, you have not encountered the recurring “Girl math” meme or more generally “FinTok” contents. In typical Gen Z fashion, trends are used to define and popularize behaviors and views of every kind, and financial decisions, as well as spending habits are no different. Cynical awareness combined with the recurring unseriousness that seems to be dominating among this demographic, is able to give us a general insight regarding the attitude that the younger generation has developed towards financial decisions and how it will affect the immediate as well as the longer term future.
The Gen Z generation, comprising people born as early as 1997, has already been declared to be the most diverse and educated generation of all times. The role of technology and social media is easily to be intended as the most direct reason for this, and as previously anticipated it has also contributed to change not only the means, but more generally the approaches that people belonging to this generation have developed relative to their financial posture. It is easy to imagine how social media are not the only factors shaping the habits of an entire generation, but they have for sure contributed to connect people in their way of rethinking what was previously taken for granted. The socio-economic situation and the shake-ups that the Millennials had to deal with, are something that members of the younger generation are already trying to learn from, while also trying to reconcile with the troublesome and unsure conditions they are forced to live in now. It is no surprise that the struggles of the 2008 global financial breakdown and recession, combined with the clear memories of the previous economic boom, led millennials to make certain financial choices that would have supposedly ensured higher stability as they were promised; however the everchanging international situation as well as the financial uncertainty that comes with it, is part of why Gen Z seems to be moving in a different direction.
The pandemic and the aftermath of it is, without a doubt, one of the main starting points we need to consider because of several reasons. Not only has the pandemic worked as an incredible amplifier for the rise of a very specific kind of social media content (fast-paced, easily accessible, concise), but of course it also represented the main historical event which we find at the roots of the cost of living crisis that is now still raging and pushing severe financial anxiety upon younger people. In addition to this, the period coming immediately after the pandemic coincided with the beginning of adulthood for many Gen Z members, and therefore to the beginning of their struggle of making ends meet. The pandemic in itself and the rise of concern derived from the shattering of certainties young people had to face in a moment when they were starting to make sense of the world surrounding them, pushed them to fear the unknown, or to be more specific in this case, how to deal with money and how to financially manage themselves. As a matter of fact, it is worth mentioning how, despite having access to countless resources, especially prior to 2020, the overall level of financial literacy among Gen Z was fairly low, which would not be surprising considering the average age of its components; however the financial anxiety sparked by the pandemic contributed to fostering the production of contents related to personal finance. According to the 2021 Personal Finance Index research, 43% of Gen Z respondents have started to build their own personal financial literacy, and the major source they seem to prefer alongside school and family is, effectively, the internet and TikTok. TikTok is no longer just the app where you go to find your latest dance trends, but it has come to represent a much more relevant social platform.
As anticipated, a great portion of what Gen Z does relative to their financial management is linked to the attempt of avoiding the mistakes of the previous generation and dismantling preimposed conventions about such serious topics like debt. Millennials have also primarily made use of social media to express their dissatisfaction with their “society-induced” life decisions, like necessarily taking out loans to pay for higher education whilst finding themselves still struggling paying bills in their 30s. Generally, according to a research conducted by the Bank of America in 2021, almost a half (40%) of generation Z has never been offered personal financial courses in their school career, using online contents as their prime resource. Moreover, it has been highlighted how the pandemic has pushed almost 38% of them to move towards saving and anti-debt choices, starting to plan towards their future.
Debt is in general something that members of the Z demographic have demonstrated to be more reluctant to. This not only has to do with the cost of living crisis – which has been accounted by Gen Z members as one of the top reasons as to why they feel financially impaired- but also from the unstable future ahead of them. As a matter of fact, it is worth mentioning that contrary to more than 10 years ago many banks and companies are no longer offering the same pension plannings and in depth-support, forcing members of the new generation to be much more considerate with their money and long term repayments. A pretty interesting set of data has been provided by the World Economic Forum, whose research had already highlighted how immediately before the pandemic, millennials were saving 15% more than their Gen Z counterparts, while still taking on 169% more debt. Members of the newest generation have come to fear taking on debt for things such as higher education as 75% of them no longer see university as the sole path to success for example. The saving trend also seems to be particularly dear to this new generation as the average age Gen Z members start researching into financial literacy and saving, according to the Bank of America research, is as young as 13 and they have shown a proclivity to pick up saving habits that are particularly detached from the ones of their predecessors. As a matter of fact, taking into account the way 40% of millennials have declared to have overspent to keep up with their social life and expectations, 72% of Gen Z respondents have declared that the price of an item is the first thing they consider when making a purchase.
Another important and particularly relevant point it is worth mentioning is the gap still existing between young men and women when it comes to their level of financial knowledge and personal financial capacities. Some of the most interesting numbers we can look at, are the ones relative to the overall investment gap, which still persists and continues to tell us how only 22% of Gen Z women compared to 37% of men feel knowledgeable about investing despite women having proved they were more likely to have taken positive financial decisions with respect to men (82% vs 78%) over the course of 2021. Of course, the old “traditions” of sexism that have always been intrinsic to typically male-dominated fields such as economics and finance, are still upholding even in the newest generation representing therefore the main cause we are still witnessing such gaps. However, there is a particularly relevant phenomenon that once again, was born and continues to be shared on social media that is worth observing; ever heard about “Girl math”?
The “Girl math” phenomenon has been defined as an internet meme popularized to describe rationalizations by young women to justify indulgent and potential irresponsible spending habits. For as “surface level” as it may seem, this is actually a pretty good example of what we have previously claimed, i.e. how social media and their trends shape social views and reinforce stereotypes. The gendered investment gap we have previously talked about, is the direct result of centuries of stereotypes catered towards women and of the intention of maintaining the status quo and keeping them out of highly gendered fields such as economics and investments. Girl math has now become a hit on all major social media platforms, it is immediately recognized for its meaning by the majority of users of TikTok and Instagram, normalizing the thought process of irresponsible spending, attaching gender to it. Women are the ones who are overspending and not making sound financial choices, reiterating the idea that dealing with money is not a “women’s business”, and if goofy spending habits are all there is to “Girl math” the positive and responsible alternative as a whole might as well be “Boy’s math”. Moreover the continuous upholding and pressuring of mindless spending in name of it being intrinsic to girlhood does not do anything other than take a toll upon women’s financial literacy teaching it is “okay”, it is almost expected of them to not be completely responsible with money, while also pushing this stereotype externally upon others who will reinforce their ideas about women not being fit for power when it comes to investment and money. Of course the videos, the meme in general, are thought to be lighthearted, but still it is the insidious nature of the phenomenon and of its implications, paired with a general tendency towards the infantilization of women online, that makes it relevant and worth of attention when learning about the still very much present gender gap among Gen Z members, when it comes to their financial and economic education.
The overall condition of Gen Z when it comes to their personal financial management will of course be very different from previous generations as the context in which Gen Z members find themselves into, are much more multifaceted and increasingly complex because of the additional contributing elements of social media and of what social media have become when it comes to the real impact they produce. The spending and anti-debt habits that seem to be very popular among Gen Z not only have to do with a trend that is typical to their generation but it is of course an additional measure of adaptation to a rough economic reality they are forced to live in, along a series of economic crises and historical events that have severely impaired their financial opportunities with respect to older generations. However the “modernity” of the generation that has been raised on social media and “with the world at their fingertips” still struggle to find a way to leave old stereotypes behind and break that “glass ceiling” that still maintains its grip upon the financial and spending habits of millions of young women.
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