The coronavirus pandemic has been a real shock to the system for the youth of Australia, with almost half (48 per cent) of Gen Z now working less or not at all, new Finder data has revealed.
To put that into perspective, 31 per cent of the general Australian population have had their income impacted.
In fact, Gen Z have been hit the hardest out of all generations: they’ve taken the biggest income hit, have seen their superannuation tumble, and they’ve need to ask for more financial relief than any other age group.
“COVID-19 has impacted all of us in one way or another, but younger people have been hit especially hard when it comes to their money,” Finder’s money expert, Bessie Hassan said.
“This age group is typically saddled with student debt and has little savings or assets. They also incur high rent costs and are more likely to be employed on a casual or part time basis.
“This means they’re vastly overrepresented in the sectors being decimated by social distancing and shut downs.”
All of this, coupled with the ongoing economic uncertainty, has meant it’s more important than ever for Gen Z-ers to set some money goals, and stay on top of their finances.
“Younger Aussies should ensure they’re safeguarding their financial position in any way they can during this time,” Hassan said.
The first thing you should do is prioritise your emergency fund.
“If you’ve asked for a rent reduction or applied for JobSeeker, remember– this won’t last forever,” Hassan said. “Transfer any spare cash into a buffer account to rely on once the Government payments stop, or your rent is reinstated.”
Unfortunately, that means going to the pub, eating out and shopping online will need to wait.
If you’re ready to set your money goal, here are some tips from My Millennial Money podcast host and creator Glen James:
Keep it black and white
Your money goals should be black and white, meaning you should know exactly how much putting away a certain amount each week will result in by December, in 2025 and in 2030.
Bonus points: Get some runs on the board this week.
“Prove to yourself it can be done and get the motivation juices flowing,” James said.
Setting one major financial goal can be daunting, so set baby goals too.
Ladies Finance Club founder Molly Benjamin told Yahoo Finance that it’s important your goals are SMART: Specific, Measurable, Achievable, Realistic, and Time Bound.
HECS/HELP debts: Forget ‘em
If you’re thinking of repaying your HECS/HELP debts, don’t do it, James said.
“Extra payments you make to HECS/HELP debts are not tax deductible to you. And, once you’re earning money, this will be chipped away over time.”
While there is no interest to pay on your HECS debt, it does compound over time, however at a relatively low rate compared to most other loans. And, early on in your career, you probably have other priorities, like saving for a house deposit or a holiday.
Did someone say side hustle?
Side hustles are a great way to earn extra cash, and even better if you save all the cash you make and put it towards your money goal.
“It will make the side-hustle feel more rewarding and your goal happen sooner,” James said.
If you’re not sure where to start, 18-year-old eCommerce guru Jack Bloomfield has an idea: start a dropshipping website.
“Dropshipping is the process of buying and selling items online without having to actually buy any physical inventory upfront,” he said.
“This enabled me at just 15 years old to start my first online business and, three years later, have turned over millions selling online.”
Get a money buddy
Money buddies are a great way to stay accountable, and bonus points if your buddy is saving towards a goal themselves.
“Call someone now and tell them what you're doing – accountability pressure can be a good thing!”
Hitting baby goals is exciting too, so don’t forget to celebrate every time you hit one! Call your money buddy and head out for a (affordable) brunch, or coffee date.
“Set up a reward for yourself at the end; ‘When I achieve this goal, I will X’. Whatever will keep you motivated,” said James.
Are you a millennial or Gen Z-er interested in joining a community where you can learn how to take control of your money? Join us at The Broke Millennials Club on Facebook!