“Gen Z are unapologetic in their love for money. While they place great value on authenticity in a cluttered world, many live by the view that money is life, and life is money, with both yielding great power. At the same time, they showed a desire to spend more collaboratively, and more consciously. This generation places tremendous thought into every item they purchase, as each item must hold value, and deliver a return on its investment. They also hold self-investment and self-care as high priorities.”
Generation Z is the generational group born between the mid-1990s until 2000, (the turn of the century). In South Africa, we know them as the born-free generation. Now, Generation Z is just beginning to mature into the workforce. They’re already the most populous generation in the world—say hello to your next consumer or client.
In South Africa, almost 1.7 million Gen Zs are already credit-active according to TransUnion. Most credit-active Gen Z consumers are in the sub-prime and near-prime risk categories. However, nearly one third have prime and better risk scores, indicating responsible financial behaviour. According to the youth marketing company, Student Village, 39% of today’s Gen Zs save between 20 to 40 % of their monthly income, while one in five students saves 40 to 60% of their income every month.
To find out more about Generation Z, we looked at a recent Flux Trends Generation Z report which asked young South Africans what they thought about insurance in particular. Here’s what they had to say:
“When it comes to insurance policies, I think my generation has realised that there’s more they can do with the money. As opposed to, you know, looking at the whatifs, we’re a generation that forgets the what-ifs and looks at the positives, like, you know, ‘what if I take the money that I was going to spend on insurance or policies, and I trade it, or what if I invest this money?’ What do I get out of it?”
“[After COVID-19] I find myself far more interested in healthcare benefits or health-care insurance. I don’t want to be stuck in the same job for 30 years and then take out my retirement funding. I’d like to see the world, I want to keep learning and expanding my knowledge. Everyone says stick to your first job for a couple of years. But, you know, I’ve just started and I’m thinking, okay, so where to next? How’s this going to help me on the next journey? And that means ‘no, I don’t need property. I don’t want property because I want to be able to move around’. But in terms of health insurance, definitely, that’s something personally I’m very, very aware of. Health is all you really have your body and your experience and your life is all that you’ve got.”
To wrap it up, while they’re concerned with securing their future healthcare and they’re less interested in long-term investing and retirement policies. There’s an opportunity to help young people understand the value of investing while they’re young. They can also be informed about the massive impact compounding interest could have if they waited until later in life to start saving for the future.
Source: Based on a 2020 Flux Trends Report titled, ‘COVID-19 Future Health Risks’