Last Updated on Dec 24, 2019 by James W

Understanding finances is a lifelong pursuit for many of us. But with some basic knowledge, dedication to the task, and will power, managing your money is doable. As the next generation to join the workforce, the economy will be passed on to you one day, Generation Z. If you’re interested in getting a head start on handling your personal finances, read on.

Start Saving Early

Chances are you’re already starting to save money, or at least know you should be saving money. Contrary to popular belief, people in the age cohort of Generation Z (people between the ages of 14 and 21) are fairly forward-thinking, with one study finding that as many as 57 percent of Gen Z respondents saying they prefer to save money rather than spend it immediately.

Saving early is important for a couple of reasons:

  1. When you practice good habits at an early age, especially during formative brain development years, those habits become part of who you are. In many cases, it’s harder to start a habit or change a behavior as you get older because you’ve already established neural pathways rewarding previous behaviors.
  2.  If you put your savings in an investment account, your savings will grow over time because of compounding interest. The more money you put away and the sooner you start putting money away, the more interest you will earn on that money over time, whether you’re saving through a retirement vehicle like an IRA or 401K, a specialty savings account, or a basic savings account.

It’s especially important that Gen Zers start saving habits now because they’re beginning to enter the workforce, pay taxes, start credit histories, and financing large purchases like cars or homes.

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Build Smart Debt

Not all debt is created equal, and not all debt is bad. For example, if you want to start a business, you’ll likely need to incur some debt through a loan. This type of debt is smart because it’s debt for an investment, a venture that will end up having a greater return on investment (ROI) than the initial costs of the debt. In contrast, bad debt would be racking up luxury expenses on your credit card for purchases which won’t appreciate in value, like vacations, fancy dinners, or clothes.

Building smart debt is a good idea because doing so strengthens your credit score. Your credit score determines whether you are able to and, if so, at what increase percentage rate you’ll be able to do things like finance a car, take on a mortgage, or get a credit card.

A good credit score tells potential creditors that you are a reliable borrower, and thus increasing your chances of receiving lower interest rates for your future loans, which in turn will save you more money. One way to help manage your loans and debts is to use your budget to track expenses like debt, reach out to creditors to see if you can consolidate loans and reduce interest rates, and use the “snowballing” technique of tackle your largest and highest interest rate loans first.

Financing a Car

Cars are a particular cost that many people in the Gen Zers will have to face, although fewer 16 to 19-year-olds are getting their driver’s license and most estimates say that Gen Zers will buy nearly 120,000 fewer vehicles annually than their Millennial cohort. Still, thousands of Gen Zers like you who currently live in or want to live in the suburbs or rural areas (where housing prices are often more affordable) will want to buy a car, rather than relying on rideshare services.

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In addition to getting a driver’s license, you’ll want to incorporate all the factors of car ownership when creating a budget that includes a monthly car payemnt. including car insurance, regular maintenance, property taxes, gas cost, and an emergency stash in case of mechanical failure.

Whether you decide to finance or lease, be sure to plan accordingly so you save up enough money to make a sizable down-payment to help defray the size of your monthly payments.

Buying (or Renting) a House

The complications involved in renting or owning real estate make be difficult, even people who are accustomed to managing their budget. The biggest decision, along with location, is whether you want to rent or own.

Factors to consider when making this decision include what can you afford, how long you plan to stay in the area, whether you’re focused on your finances, career, or personal life, and whether you are up for the responsibility of home repair.  A rent versus buy calculator can help you gauge expenses associated with both renting and buying.

Your housing also doesn’t need to be a house. Apartments, condos, and townhouses are all excellent alternatives, and are sometimes more affordable. If you’re not ready to go through the process of buying a home and prefer to rent, you can further decrease your expenses by getting roommates instead of living in a studio or a one-bedroom.

Diversify Your Income Streams

There are two ways to have more money: By making more money (like by getting a raise at your current job or getting a higher paying job) or by having more income streams to supplement your primary income by having a side hustle or picking up a passive income stream.

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Side hustles in particular are on the rise because of higher costs of living and the desire to have discretionary funds. In fact, 45 percent of Americans who have full-time jobs also work a side hustle to supplement their income.

In today’s gig economy, side jobs may be the best way to increase the amount of money you have without engaging in risky investment schemes. Passive income is also great because, in many cases, its set it and forget it. In addition to being low-cost ventures, they can also be good ways for you to network, exercise your passion, and build toward a future career.

The essentials of managing your money

At first, taking in all these steps and tips can be intimidating, especially for someone who’s young and just barely acquainted with a paycheck. The good news is that you don’t need to know absolutely everything about money management at once. Take all of this advice in steps; after all, it’s unlikely you’ll have to do something like buying a car and getting a mortgage simultaneously. Money management is a skill honed over time, not in an instant.

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Jayson is a recent graduate from Arizona State University who lives in Phoenix. Being a lover of entrepreneurship and travel, he’s always ready to bust out his laptop and visit new places. He started writing in hope of sharing his experiences with fellow entrepreneurs and travel bugs. Follow Jayson on LinkedIn.

Founder and chief editor of Blogger, Affiliate Marketer, Tech and SEO geek. Started this blog in 2011 to help others learn how to work from home, make money online or anything related to business and finances. You can contact me at