Behind the Numbers: The Banking & Payments Show Episode: How Young People Bank, Spend, and Invest Their Money Release Date: April 8, 2025

In this insightful episode of EMARKETER’s Behind the Numbers, host Rob Rubin delves into the financial behaviors of Generation Z. Joined by EM analysts Grace Broadbent and Lauren Ashcraft, Rubin explores how young consumers navigate banking, spending, and investing in today’s dynamic economic landscape. Through engaging discussions and compelling data points, the trio paints a comprehensive picture of Gen Z’s financial priorities and challenges.

1. Banking Behaviors

Key Insights:

• ATM Proximity Matters: Gen Z places significant importance on the accessibility of ATMs when selecting a bank.
• Mobile Banking Dominates: A majority of young consumers prefer digital banking solutions over traditional methods.
• Emerging Preferences for Alternative Banking Platforms: Non-traditional banks like Cash App are gaining traction among Gen Z.

Notable Data Points:

• 13 Factors Influencing Bank Choice: Grace Broadbent highlights that there are 13 factors Gen Z considers when choosing a bank, with the top priority being the proximity of ATMs (42.4%) [00:58].

  "The top priority when choosing a Bank with 42.4% of Gen Z's Gen Zers listing this as their top priority is the ATM proximity." — Grace Broadbent [00:58]

• 60% Use Mobile Banking: Rob Rubin introduces his number, stating that 60% of Gen Z utilizes mobile banking platforms [04:19].

  "That's the number to me that's so fascinating right now is ATMs especially with my number which was 60% use mobile banking." — Rob Rubin [04:19]

Discussion Highlights:

• Cash vs. Digital: Despite the digital-native nature of Gen Z, there is a notable trend towards "cash stuffing," a budgeting method that involves allocating cash into envelopes for different expenses. Grace attributes this to a backlash against an entirely digital financial environment [04:45].

  "It's called cash stuffing. And that's also like one of their budgeting tactics. So they really do care about being able to get their hands on cash." — Grace Broadbent [04:45]

• Rise of Non-Traditional Banks: Lauren Ashcraft points out that Cash App ranks as the second-highest bank in terms of consumer banking satisfaction among Gen Z, surpassed only by Bank of America, despite lacking physical branches or ATMs [05:46].

  "Cash app is Gen Z's second highest ranked bank in terms of consumer banking satisfaction scores." — Lauren Ashcraft [05:46]

2. Spending Habits

Key Insights:

• High Credit Card Utilization: A significant portion of Gen Z credit card users are maxing out their limits.
• Buy Now, Pay Later (BNPL) Popularity: A majority of young consumers are utilizing BNPL services, impacting their overall financial health.
• Desire for Immediate Gratification: Gen Z prioritizes spending on luxury goods and experiences over long-term savings.

Notable Data Points:

• 1 in 6 Maxed Out Credit Cards: Lauren Ashcraft reveals that 1 in 6 Gen Z credit card users have maxed out their credit limits, a higher rate than any other generation [06:50].

  "1 in 6 gen Z credit card users have maxed out their credit cards, which means they've utilized more than 90% of their credit limits." — Lauren Ashcraft [06:50]

• 60% Engage with BNPL: Rob Rubin shares that 60% of Gen Z and Millennials are using Buy Now, Pay Later services [07:22].

  "More than 60% of Gen Zs and Millennials use Buy Now, Pay Later." — Rob Rubin [07:22]

Discussion Highlights:

• Impact of BNPL and Credit Card Debt: Lauren discusses the intertwined use of BNPL and credit cards, expressing concern over the long-term financial implications as BNPL debts may reduce the ability to pay off credit card debts [07:40].

  "Credit card debts are building and building and building." — Lauren Ashcraft [07:40]

• Spending Motivations: Grace introduces that 75% of Gen Zers believe they deserve their purchases, and 70% have a basic understanding of money, prioritizing luxury items like skincare products [08:52].

  "75% of Gen Zers believe that they deserve which I think is an interesting word to get most of what they want." — Grace Broadbent [08:52]

• Influence of Social Media and FOMO: The fear of missing out (FOMO) driven by social media platforms like TikTok significantly influences Gen Z’s spending decisions, leading to increased purchases of experiences and luxury goods [09:37].

  "FOMO from social media and a lot of it also is a lot of this generation was stuck at home during COVID years and it is the quote unquote revenge spending." — Rob Rubin [10:31]

3. Investing Patterns

Key Insights:

• Saving Priorities vs. Actual Savings: While a large percentage of Gen Z prioritizes saving, many are not saving for long-term goals like retirement.
• Preference for Alternative Investments: Gen Z shows a strong inclination towards alternative investments such as cryptocurrency, real estate investment trusts (REITs), and private equity.
• Minimal Retirement Savings: A significant portion of young adults are not saving for retirement, highlighting a gap between financial aspirations and actions.

Notable Data Points:

• 79% Prioritize Saving: Rob Rubin cites a study where 79% of Gen Z consider saving as their top financial priority [12:08].

  "The standard study found that Gen Z's biggest financial priority, 79% said that it's saving." — Rob Rubin [12:08]

• 61% Not Saving for Retirement: Contrasting the high priority of saving, 61% of young adults are not saving for retirement [13:16].

  "According to a CNBC and Genlab study, 61% of young adults are not saving for retirement." — Rob Rubin [13:16]

• Crypto vs. Retirement Accounts: Lauren Ashcraft highlights that Gen Z investors are four times more likely to own crypto than a retirement account [16:42].

  "Gen Z investors are four times more likely to own crypto than a retirement account." — Lauren Ashcraft [16:42]

Discussion Highlights:

• Short-Term vs. Long-Term Savings: The conversation reveals a discrepancy between Gen Z’s desire to save and their actual savings behaviors, often favoring short-term goals over long-term financial security [12:34].

  "Maybe it's more so saving for these concerts and trips we were just talking about." — Grace Broadbent [13:32]

• Psychological Factors: Grace Broadbent discusses the psychological impact of witnessing older generations struggle with savings and retirement, influencing Gen Z to prioritize immediate experiences over long-term financial planning [14:35].

  "They've watched their parents save and try to save and work multiple jobs and their retirement and savings got absolutely obliterated multiple times over the last couple of decades." — Grace Broadbent [15:20]

• Alternative Investments Interest: Beyond crypto, Gen Z shows interest in REITs and private equity, indicating a willingness to explore diverse investment avenues despite limited traditional retirement savings [17:26].

  "Gen Zers are three times more interested in alternative investments than any other age group." — Grace Broadbent [17:28]

4. Insights and Conclusions

Host's Reflections: Rob Rubin expresses concern over the depicted financial behaviors, emphasizing the potential future economic challenges stemming from high credit card debts and insufficient retirement savings. He introduces the concept of a "debt jubilee"—a hypothetical large-scale debt forgiveness—as a possible, albeit drastic, solution to mounting debts [18:16].

"A debt jubilee is a clearance of debt from public records across a wide sector or a nation... that might be an interesting topic to talk about." — Rob Rubin [18:28]

Analysts' Perspectives: Grace Broadbent connects Gen Z’s financial behaviors to broader economic trends, noting that current high interest rates and housing costs further exacerbate the financial strain on young consumers [13:52].

Lauren Ashcraft underscores the urgency of addressing these financial patterns, warning that ignoring the burgeoning debt could lead to severe economic repercussions [16:37].

Future Outlook: The episode concludes with a sense of anticipation for future discussions on related financial issues, such as the implications of a debt jubilee, highlighting the ongoing challenges and potential strategies to support Gen Z’s financial well-being [19:03].

Final Thoughts

This episode of Behind the Numbers offers a comprehensive analysis of Generation Z’s financial landscape, revealing a complex interplay between traditional and modern financial behaviors. From valuing ATM accessibility and mobile banking to grappling with credit card debt and prioritizing alternative investments, Gen Z demonstrates both adaptability and vulnerability in their financial decisions. As the digital economy continues to evolve, understanding these trends is crucial for marketers, retailers, and financial institutions aiming to engage effectively with this influential demographic.

Stay Informed: For more in-depth analyses and updates on digital media trends, subscribe to EMARKETER’s Behind the Numbers podcast, available Monday through Friday on all major podcast platforms.