Only 38% of Gen Zers are considered financially literate according to WalletHub data – and the finance experts Benzinga spoke with say the problem runs deeper than mere knowledge gaps. Why? Because unlike previous generations, Gen Z grew up in a digital ecosystem inundated with financial advice from TikTok, Reddit and YouTube.
Granted, some of it is useful. But much of it is dangerously misleading. The result is a generation struggling to build financial confidence while navigating debt, investing and long-term wealth-building — all without a solid foundation.
“Gen Z doesn't lack intelligence. They lack structure,” says Julian Merrick, financial educator and CEO of fintech firm Supertrader. “They've grown up with scattered financial advice… Most never had a class in school that covered interest rates, taxes or compound growth in any real way. So now they're building their financial lives through trial and error in public, and it's costing them time and confidence.”
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The Consumer Mindset Versus Savvy Saver
One of the biggest hurdles Gen Z faces is that algorithms have groomed them to be consumers, not savers: "They've been inundated with highly sophisticated advertising since the moment they started engaging with digital content," Vince Shorb, CEO of the National Financial Educators Council, tells Benzinga. “The goal of advertising isn't financial empowerment; it's getting people to buy their product.”
This constant pressure to spend, combined with a lack of formal financial education, leaves many young adults unprepared for real-world money management. “Most schools still don't treat personal finance like a core subject,” Shorb says. “That combination — constant pressure to spend and no real preparation — has a detrimental impact on their financial confidence and literacy.”
The Knowledge Gaps: Debt, Risk and the Illusion of Quick Wins
Experts say some of Gen Z's financial blind spots are particularly glaring. Some believe credit cards are evil, while others think maxing them out boosts their credit score. Another belief: that buying a single crypto coin counts as portfolio diversification. “They're either terrified of losing money or chasing fast wins,” says Merrick. “Neither mindset builds long-term wealth.”
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Eric Croak, certified financial planner and president of Croak Capital, sees similar issues, especially with regard to social media. “Gen Z has access to more data than any generation before them, but zero context," he says. "TikTok and Reddit can teach you about meme stocks and hustle culture, but they do not teach how interest compounds or how debt multiplies.”
The biggest misconception? “They underestimate what $100 invested monthly at 9% can turn into by 60 (around $600,000),” Croak says. “That is because they were raised during low-rate environments and student loan chaos, so compounding feels abstract or even deceptive.”
How Gen Z Can Start Building Better Habits
Financial experts emphasize that building wealth isn’t about sudden windfalls but understanding how everyday choices compound over time. “Forget saving versus spending. The real metric Gen Z should learn is opportunity cost,” Croak says. "Every dollar sitting in a 1% yield account is a missed chance to earn 5% to 7% annually in equities."
He suggests mastering the investment fundamentals first — ETFs, steady investing through dollar-cost averaging and index funds — and saving the risky bets like day trading and NFTs for later.
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The barrier to entry in investing is also lower than many realize. “You don’t need $5,000 to start. You need $50 and some patience,” Croak says, adding that even small losses teach valuable lessons.
“Many young investors believe they need thousands of dollars to get started, which simply isn't true anymore," Stephen Callahan, trading behavior analyst at Firstrade, tells Benzinga. "Today, with fractional shares, someone can start investing with less than the cost of a night out.”
Digital platforms like eToro also make it easy to get started with investing in fractional shares, and the social features are appealing to Gen Z as well, though Merrick cautions against treating any single app as a complete education. He recommends balancing digital tools with trusted resources like financial books or the free Next Gen Personal Finance curriculum.
Their biggest hurdle is a phenomenon probably familiar to Gen Zs fresh out of grade school and college: Overcoming procrastination. “Later doesn’t come,” says Merrick, noting that financial security comes from habits, not overnight solutions. And the overall message is clear: Gen Z can build substantial wealth, but only by starting now and staying consistent.
So rest easy, Gen Z: You aren't doomed. Just playing a little bit of catch up. And if they apply themselves in the right way, experts believe they can overcome the financial literacy gaps holding them back. “If Gen Z treated their Roth IRA like their Venmo feed, they would be untouchable by 40," says Croak.
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