Tamia Gregory, 21, is a rising senior at Delaware State University. While she’s excited to reach a new chapter in her collegiate career, there’s still a financial burden over her head, like many college students have.
Growing up, we’re always taught that college is the route, but we often aren’t prepared for the financial conversations surrounding going to school and saving our money. “Being able to save money is a privilege because not everybody makes enough money that they can put some to the side, and what they have is exactly what they need,” Gregory told GU.
The conversation surrounding student loans is the primary concern regarding Gen Z’ers stepping into the world of financial literacy. According to Bankrate, due to the widespread necessity for a postsecondary degree and the rise in higher education, Gen Zers, compared to older millennials — who graduated at the same age as today’s students — are more likely to hold debt and tend to have higher balances upon graduation.
For Gregory, the subject surrounding debt influenced her journey in college as she attended a community college for the first two years of her collegiate career. Once she transferred to her university, she only had to take out money for one year and this upcoming year.
“It’s still a lot of money, and I’m doing my best now to work as hard as I can, so I feel secure or confident that I’d have a job secured by the time I graduate to pay those loans back,” she said. “It’s honestly something that keeps me up at night, anytime it crosses my mind because I’m just like, ‘how am I going to pay all that money back?'”
Girls United spoke with Michael Pugh, President and CEO of Carver Federal Savings Bank to discuss the key tips Gen Z’ers should use to start their journey toward financial literacy.
Create A Realistic Budget
Creating a budget for yourself as early as possible can maintain your financial discipline. “Set a realistic budget for yourself that builds in a reasonable amount of fun so that you’re more likely to stick with it,” Pugh said.
Save What You Can
In order to create a stable financial foundation we have to try to save anything we can. “Even if it’s just $25 a month, be sure to save something out of your paycheck for a rainy day, and make sure that you reflect any raises you get in your 401k contributions to set yourself up for the future.”
Work Toward Credit Responsibility
We don’t talk enough about credit and how it affects our future. “Be sure to monitor your credit card usage so you don’t charge more than you can pay back,” he said. Credit impacts how we can build our lives when we officially enter adulthood.
Maintain Your Financial Commitments
For Gen Z’ers having and maintaining financial commitments are key to having a stable future and relationship with money. “Double-check your paychecks to ensure you have the correct withholdings. Otherwise, you risk facing a surprise tax bill,” he said.
Build A Financial Safety Net
Although life happens and we can’t control everything we have the power to take the initiative to begin building some kind of safety net for the future. “Take advantage of healthcare benefits and life insurance policies earlier in life,” Pugh said. “While those issues may seem far off into the future, securing a policy when you are 25 versus when you are 40 makes a big difference. Buying in now is an opportunity to secure lower-cost premiums, and it helps you assemble a financial safety net that you can rely on throughout life’s ups and downs.”
Create A Banking Relationship
As we get older, we see the importance of building relationships, especially without money, and in order to do that we need to construct a bond with our bank. “It is also important to begin building the banking relationships that you can lean on later in life when you need a personal loan, mortgage, or funding for a small business,” Pugh said. “More than simply looking for the bank with the most convenient ATM locations, young people should consider institutions like community banks and CDFIs such as Carver Bank, where 80 cents of every dollar is reinvested into educating, funding, and building up the people and small businesses that make up the communities we serve.”
About Kenyatta: Clark Atlanta University and Medill School alumna Kenyatta Victoria is the Girls United writer covering everything from news, pop culture, lifestyle, and investigative stories. When not reporting, she’s diving deep into her curated playlists or binging her favorite comfort shows.