How Gen Z can get more out of their money

Money asked several financial planners in their 20s and 30s what Generation Z can do to make their money stretch further, and to help ensure a better financial future.

The experts say some of the best strategies include not spending cash on things you don’t need, choosing the appropriate superannuation fund and investment option, blocking out financial noise and remaining unemotional when investing, and staying on track with your long-term money goals.

Jessica Brady, financial planner and co-founder of Fox and Hare, says investment volatility creates opportunities for long-term investors.Credit:Jeremy Piper

Do you need a car?

It costs thousands of dollars a year just to keep a car on the road. There are a number of ride-sharing services, including those that allow you to hire of a car, should you want to escape the city for a day.

Those who live near good public transport links should ask themselves whether they really need a car, says Jessica Brady, 34, a financial adviser and co-founder of Fox and Hare.

“It depends on where you live and how good the transport infrastructure is,” Brady says. “I live in the inner-city and I ditched my car years ago. I joined a ride-share group, and it has been far more cost-effective,” she says.

Many people take out high-interest personal loans to buy a car, which is another reason why not owning a vehicle can save a lot of money, Brady says.

Fix your super

You can choose who manages your super, and you should check how your fund’s performance stacks up, says Tim Manwaring, a 26-year-old financial planner at Eureka Whittaker Macnaught.

The Australian Taxation Office has a website where super fund returns can be compared. It can also be beneficial to consolidate funds, if you have more than one, as you would save on paying two sets of fees, Manwaring says.

Younger people should invest their super money in growth options such as shares, say financial planners.Credit:

Those aged between 20 and 30 should also invest in one of their fund’s investment options that has plenty of exposure to “growth” assets, such as shares. They will be working and contributing to super for another 30 or 40 years, meaning they have plenty of time to ride out the ups and downs of the sharemarket.

Choosing a “growth” option would produce higher investment returns – and more money in retirement – over the long term than if they were invested in one of their fund’s more conservative options, he says.

Changing options can be as easy as giving your super fund a phone call.

Buy now, pay later trap

Buy now, pay later (BNPL) services are proving popular with the young, many of whom have never had a credit card, or have ditched them.

BNPL business models differ, but they all allow purchases to be made immediately, with the money repaid to the provider, in most cases, in four equal instalments.

Most of these companies earn revenue from merchant fees and charges to consumers who miss a repayment.

Brady is “not a fan” of BNPLs. Anyone using them has to have a hard look at why they are using them, she says. “They can encourage instant gratification.”

Use your cash savings for any purchase and, if you do not have the cash, save for it, Brady says.


Buying cryptocurrency is not a way to get rich overnight, as the risks are too great, says Travis Schindler, partner and adviser at Hewison Private Wealth.

Crypto is a risky investment, does not pay income and, if it has real value in society, it is yet to be proven, the 31-year -old says.

‘As long as you have stable income and the ability to save a cash buffer, investment volatility creates [buying] opportunities.’

The only way to build wealth is to have good, healthy financial habits, Schindler says.

“If someone is really keen [on crypto], they could dip their toes into the market with a small amount of money that they are prepared to lose,” he says.

Ignore the noise

Many young people have not experienced market cycles.

Interest rates have been low for more than a decade, and young people have never experienced a period when rates are rising.

Rising property values have left many younger buyers wondering if they would ever own a roof over their heads, but property prices – at least in Sydney and Melbourne – are on their way down.

Cycles are even sharper in sharemarkets. The Australian equity market fell by 35 per cent over a couple of weeks amidst pandemic-induced selling in early 2020, only to recover almost all of those losses by the end of that year.

Anyone who tries to time the market gyrations would likely lose out, says Brady.

People often panic when markets fall. “They think the sky is falling,” she says.

“As long as you have stable income and the ability to save a cash buffer, investment volatility creates [buying] opportunities for long-term investors,” Brady says.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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