With the rising cost of living, recession, and inflation a top issue in every media outlet, saving money and investing in assets to avoid a broke life seems more challenging than ever.
People are working extra hours or taking up many jobs to live decent lives and a debt-free life, while some survive from paycheque to paycheque in their quest to avoid a broke life.


Avoid a Broke Life

Young people born between 1997 and 2010, called Generation Z, make up 2.47 billion people (a third of the world's population ).
These young adults are now joining the workforce or are still in school, earning money from side hustles but spending over $300 billion yearly.

This generation of young people is maturing in an era when financial stability is more crucial than ever because inflation is skyrocketing. Younger people are more anxious than prior generations about taking control of their finances early in life to avoid a broke life.

Comparing figures to other generations(Millennials and Baby Boomers), Gen Z employees are not saving enough to avoid a broke life. Personal Financial Management among Gen Z has been a topic of great concern on the radar of most financial pundits. On top of their list has been a growing concern about the five issues below.


 1. Dependance on social media in making finance and monetary decisions

2.  Investment in high-risk ventures, although there is a high possibility of capital loss or underperformance because the investment offers prospective returns that are more attractive than the returns available from mainstream investments.

3.  Buying products online, even though costs are generally higher online.

4.  Spending a high percentage of income settling bills. Young people have so many costs to settle at the end of every month, from monthly entertainment subscriptions like NetFlix to internet subscriptions which can be eliminated and canceled on the spot to save a couple of hundred dollars a year.

5. Saving less for retirement or postponing retirement plans because they believe they will have more time to invest later.


What are The Five Simple Ways Gen Z can Avoid a Broke Life?


1. Establish a Budget and Track Your Spending

Keeping track of where you spend your money is one of the best methods to gain control of your finances. Monitoring your finance will help you spend less than you earn, which means you should balance your income and keep track of all your spending, regardless of the cash amount. You can use software or an app or write in a notepad to assist you in monitoring how you spend every cent and what you spend it on. You are not being critical or spending time with useless items on your list; you are only keeping track of where your money is going.


2. Do not take Speculative Financial Advice

Making rash decisions with money is rarely a good idea because Financial decisions are complex and thus need the help of a professional planner.
Social media has a strong influence on the financial outlook of Gen Z, and their understanding of money is therefore different from that of previous generations. Young people are more likely to rely on sites such as YouTube, TikTok, Instagram, and Twitter for information about money than official sources. However, to build financial worth, an experienced financial advisor can help you see where your money goes and help you decide how to make the most of it.
Besides, a financial advisor can help determine whether you are eligible for government help programs, like interest deductions, etc. They also have expert knowledge on whether a particular investment strategy is best and can provide valuable guidance on taxes and other aspects of personal finance.


3.  Do not Invest in high-risk ventures

Investing is great but putting money in experiences that governments and central banks have little control over, where prices rise or fall due to sudden changes in market sentiment, is not the best enterprise to invest funds.
Get-Rich-Quick schemes that promise rapid financial success are usually scams, they look fine on paper, but they do not work because there is no guarantee you will get wealthy overnight. Although high-risk investment schemes offer higher returns than regular investments, they are often associated with losses if you don't know how to invest in them. A more stable and longer-term approach—which promotes financial health and stability is best because there is not always a precise relationship between risk and return. Investors may not always receive a payoff for their investment in high-risk or Get-Rich-Quick schemes. Wealth does not appear, so it is critical to invest in genuine ventures.


4. Establish a scientific saving plan for retirement

Everyone needs a retirement plan (putting off saving for retirement or thinking you have all the time in the world to invest later is never a healthy decision to make in life).
Scientifically-based savings plans are a great way to start saving because it helps you identify your priorities and create a plan for achieving them. You can create a scientific savings plan for retirement by calculating and writing down what you can afford to save each month based on your salary, earnings from Social Security, and any other sources of income.
The minus 10% rule, which argues that if you're in your 20s and save at least 10%, you should have a comfortable retirement at age 65, is an excellent scientific plan.
A savings plan helps you stay motivated as you progress toward your goals by creating a budget to track your spending habits and adjust while avoiding common pitfalls, such as overspending or falling behind on bills. Establishing a scientific-based savings plan will help you determine the type of retirement lifestyle best suited to your needs and goals and assist you in considering lifestyle changes to lay a solid foundation for your future financial security.


5. Invest in building yourself

A well-paying job is the ultimate goal of anyone seeking financial independence because a good-paying job determines the quality of life of an individual. There are many paths to financial freedom, but none can do without self-investment to develop new essential skills because every sector of life is evolving. To make more money, it is a must to master new talents that will lead to higher compensation. The good news is that you do not have to start from scratch. Self-investment is an excellent technique to expand your skill set and gain experience to increase your earning potential. It entails putting money into something you are enthusiastic about that aligns with your long-term goals and passions. It could range from investing in yourself by taking a course or receiving coaching to launching a business or starting a side hustle and other opportunities where you can put your skills to use. This way, you can build up your skillset and a resume that will position you as a person of authority in any industry.


Bottom Line

Being a member of Generation Z is similar to being a member of previous generations, and being a part of this demography does not put you at a disadvantage. Nevertheless, you must safeguard against common financial risks and keep a balanced approach to your finances to avoid a broke life. It is vital to remain watchful and ensure that you are ready for the future by prioritizing your finance while attempting to fulfill the needs of the high cost of living.