The wealthiest people in the world know that the sooner you start building your wealth the faster it grows, giving you even more financial opportunity, which is why empowering Gen Z to close the financial gap and improve their smart money habits is so important.
Making financial literacy a priority.
Youth financial empowerment became very important to me when my son came home from his first semester at college in credit card debt. This can happen so easily, especially with so many convenience services, subscriptions and those small purchases on credit cards that add up over the month.
Then when you add in the fact that “Gen Z carries the highest average personal debt, at $94,101—far above millennials ($59,181) and Gen X ($53,255),” (Newsweek) it makes it even more important for Gen Z to learn about debt management and how money works.
>>CLICK HERE FOR TIPS TO CONTROL STUDENT LOAN DEBT<<
Bridging the knowledge gap financially is a big step in the right direction. Things become much less scary and easier to deal with when you understand them better, especially when it comes to your finances, money management and mastering smart money habits.
Three steps for excellent Gen Z money management.
One of the things I always say is that you either you are in control of your money, or your money is in control of you. A lack of financial literacy keeps you stuck in the rat race of living paycheck to paycheck, which is a stressful way to live.
It doesn’t have to be that way. In fact, building wealth is simple when you take these three steps.
The first step is developing a growth mindset in finances. Building wealth starts in the mind first. If you believe you can do it, you will, and when you surround yourself with people who have built wealth or have that same kind of mindset, you will get to financial freedom a lot faster.
The power of your network—the power of association—is and always will be one of your greatest assets. Spend time with other people who want to build their growth mindset in finances and making money will become so much easier.
Next, develop your power of financial literacy. The essentials are:
- Understanding the difference between good and bad debt. In short, good debt is money borrowed and invested into an asset that returns a greater amount than the interest paid, resulting in positive cash flow. Bad debt is money borrowed and used to purchase personal items (non assets) that do not generate income, resulting in additional expense.
- Developing a spending plan. Many people focus on earnings without figuring out how and when they are going to distribute (spend) that money. Having a spending plan allows us to be intentional about spending and it provides a roadmap to your specific financial goals.
- Learning how to make smart investments. Investing is a big area and it does take time to learn. Many self-made millionaires make it easier by engaging in a smart investing strategy—working with a mentor. When you find a mentor who is right for you, they will help you build your own smart investing strategy that is personalized to your specific circumstances and future desires.
- Engaging the power of consistency. Making small contributions consistently adds up over time. For example, if you invest $250/month at a 10% return (which is the stock market average per year), and you let the interest compound, after just over 23 years, you will have $813,060. It’s easy to be consistent if you automate your investments. That way you don’t even have to think about it, making it even easier to build your financial freedom.
Step three is finding ways to expand your income. In the same way that you don’t want to put all your investments in one place, it’s also better if you have multiple streams of income. The great thing is that there are so many ways you can make extra money, even if you have a fulltime job!
One of my favourite things is teaching people that they can buy, build or create their own assets. If there is something you know how to do and you can teach it to others, you have an asset you can sell! Think about creating things like:
- Books
- Courses
- Videos
- In-person classes
- Online group training
You could also start your own business to bring in extra income. Some easy ones to launch and require little experience are:
- Pet sitting or dog walking services
- Freelance services like graphic design, writing or becoming a virtual assistant
- Personal assistant services
- Car detailing
- Meal preparation for the elderly, busy families and professionals
Or many people make money by renting out extra rooms or buying and reselling vintage or used products and clothing that they find at garage sales and second-hand stores.
When you allow yourself to expand your mind, you will find that you can think of many ways to make extra money that you can use to pay down your debt and/or make smart money investments into your future.
As you can see, creating financial freedom become simple when you expand your financial literacy and embrace the steps for building wealth. Gen Z money management really starts with learning a little more about how money works and how you can use it to attain your financial freedom.
Empowering Gen Z with Sharon Lechter Resources!
I love empowering people with financial literacy—the younger the better—because greater financial literacy gives you the power to make better financial decisions throughout your life. That has a massive impact on your future and the amount of wealth you can build.
Whether it’s for you or a Gen Z you love, these resources will help create financial freedom:
GUIDEit Entrepreneurial Guidebook for Young Entrepreneurs
Money Mastery Financial Literacy Course
“If you are ever offered the opportunity to work directly with Sharon Lechter or to be a part of her Play Big Movement and Money Mastery course, just jump right in. She is a leader when it comes to teaching financial freedom and what it truly means to become a master of your money instead of a slave to your money. In about three months I was able to apply her mindset and money calls to action from the Play Big and Money Mastery courses and was able to pay down $70,596 of bad debt. I am so proud and feel very privileged to be her mentee.” — Kim Mennella, CEO, Jorani Solutions, Inc.