If there’s one thing I find really inspiring about my children, it’s their unyielding resiliency and appetite for learning and growth. From what I’ve seen, these are the defining features of many young Canadians today, and as they transition through life stages, these qualities will help them truly succeed.
This year, the theme of Financial Literacy Month in Canada considers our increasingly complex and constantly changing financial marketplace – a topic that is especially important for Gen Z (those born between 1997 and 2012). This is where financial resiliency – the ability to get through financial challenges, such as unemployment and the rising cost of living – can play a vital role in helping this generation face future economic challenges with greater confidence and financial awareness, especially as their responsibilities grow with time.
Appetite For Credit
Younger Canadians are feeling the squeeze of inflation more than others and are more vulnerable to economic changes. Skyrocketing housing and rental prices, trailing student loan payments and sharply rising costs of living have all become barriers to independently affording life as a young person in Canada. Economic upheaval and fallout from the COVID-19 pandemic have also left this generation particularly concerned about their financial health and well-being.
Despite this, credit cards are still the most widely held product among credit-active Gen Z, and they continue to show resiliency by embracing credit opportunities and new financial tools. They have a surprisingly strong appetite for credit, and at this age, are more aware than previous generations of the importance of building and maintaining healthy credit to navigate the modern economy for the long term.
However, a 2022 Leger survey commissioned by Capital One also reveals that only 59 per cent of surveyed Canadians, aged 18-34, feel they have good credit. This is where gaps in financial knowledge can hinder Gen Z from charting a path to better financial resilience.
Meeting Gen Z Where They Are
As financial industry leaders, it is vital that we meet Gen Z where they are and encourage their curiosity by providing them with the necessary resources that can contribute to a strong financial future. This requires adapting to meet their needs and interests, rather than requiring them to change, and taking the time to earn their trust.
As the first generation of digital natives, Gen Z has come to expect a seamless customer experience with integrated digital technology – including how they access, use and manage credit. With limitless social media and ever-evolving digital learning platforms, we can see that Gen Z are also taking education into their own hands, with YouTube and TikTok being a few of their favorite go-to sources.
When my kids sit down to do their homework, they turn on their laptops and begin working through exercises posted online by their teachers. They complete quizzes and earn new avatars they can send to their friends. When I’m helping them with homework, I choose to pull out a piece of paper to help them work through problems. I don’t ‘force’ them to do their homework on paper and they always figure out their final answers online, but I am able to still support them – and the old meets the new combination works pretty well.
When it comes to our customers though, it is incredibly important that we take the time to listen to and understand their needs, struggles and goals. This is something that many of our associates at Capital One do frequently through our “Coffee with Customers” program. It helps to ensure we’re continuing to meet Canadians where they are in life and in their finances. In a recent session, there was a conversation with a mother who explained that she worries everyday about her young daughter’s ability to build credit now that she’s living on her own and experiencing rent increases for the first time. It’s stories like these that inspired our Belief brand ethos, which is based on the principle of believing in people to create financial opportunity. Providing trust and support to Gen Z empowers them to stay on track with their financial journeys, while helping them build their financial resiliency.
Prioritizing Financial Self-care and Mental Well-being
In addition to providing Gen Z with the tools and resources to help them succeed financially, it is essential to help them understand how making better financial decisions can help them avoid the cycle of financial stress that can take a toll on their mental health and well-being.
I’m an advocate of financial self-care, which is the process of re-evaluating your relationship with money and incorporating personal finances into your regular self-care routine. It’s the financial equivalent of physical well-being and requires us to find ways to reduce stress associated with finances. For Gen Z, this could look like finding ways to stay organized (staying on top of subscriptions, regularly check-in on your credit score, keeping a personal finance planner), and sharing learnings and questions with friends.
I put this into practice with my family by continuing to use the age-old practices of setting a savings goal and putting aside money on a regular basis until we get there. For our kids that might be a new video game, for example, which may take a few months versus a smaller, less expensive item. Either way, it’s the lessons learned along the way that truly exceed the physical reward they’ll get in the end.
As leaders in the financial services industry, we have a responsibility to empower this young generation of credit-active Canadians and help build their financial resiliency, with their unique challenges and needs in mind. Let’s support Gen Z’s unyielding resilience by facilitating their appetite for growth and helping them find their financial balance.