7 Financial New Year’s Keepers for Gen Z

On December 31, 2024By Littum

The Fidelity Investments 2025 Financial Resolutions Study found that Gen Zers came in second only to millennials for feeling financially optimistic, and making plans to achieve financial goals and be willing to make decisions. However, some in this group struggle to pay off student debt, lack sufficient savings and find it difficult to meet expenses.

If you’re a Gen Zer adult, starting 2025 with some smart money goals can help improve your financial stability and prepare you for big decisions, including buying a home and starting a family.

Check out: 6 financial New Year’s resolutions if you’re planning to buy a house in 2025

Discover more: 7 money tricks to do now to start the new year off right

Here are seven financial New Year’s resolutions worth considering.

Since financial literacy is very important to achieving goals, a good 2025 resolution is to learn the basics of budgeting, managing debt, saving, investing, and risk management. However, Gen Z is often inclined to use social platforms like TikTok to get money advice that may not be accurate. In fact, TikTok is one of the most popular sources for Gen Z to get financial information, as reported by CNBC.

While some of this information can be helpful, Gen Zers may be better off turning to trusted sources, such as financial advisors or mentors, banking financial education portals, expert videos and personal finance books. Universities and government agencies also often offer financial education courses and other resources.

Find out: 10 financial decisions for 2025 you can make now, according to financial activist Dasha Kennedy

The Fidelity survey also found that Americans of all ages struggled with inflation and daily bills. But with many in college or early in their careers, Gen Zers in particular may struggle and rely on extra money from parents to help cover housing and other essentials.

Improving financial stability in 2025 will require creating a budget that wisely allocates revenue and avoids wallowing in luxuries that hinder financial goals. It is so necessary to live on that budget and change financial behavior when expenses seem to get out of control.

You might find it easier to keep this fix with apps like Goodbudget and Rocket Money.

According to 2024 Bank of America Better Money Habits map out57% of Gen Z respondents lacked a three-month emergency fund, which is commonly seen as the minimum recommendation. Not having one not only increases financial stress, but also puts Gen Zers at a greater risk of building up credit card debt.

To prepare for unexpected expenses, consider a New Year’s resolution to set up a high-interest savings account and contribute regularly until you’ve built up at least three months’ worth of expenses. This money should remain in place until it is needed for real emergencies – such as medical bills or major repairs – rather than unnecessary spending money.

Student loans and credit card debt are common sources of financial anxiety for Gen Zers. While it’s ideal to avoid debt in the first place, the next best thing is to resolve to pay it off or at least better manage it in the new year.

One strategy is to use the debt snowball plan to go after your debt from smallest to largest amount, although you may want to target debts based on their interest rates instead. For large student loans, choosing a realistic repayment plan that prevents default while reconsidering future repayment options can be a good compromise.

Although Experian data showed that Gen Z had rising credit scores over the past few years, this group’s average credit score still remained below the national average. If your credit needs some work, you may have trouble getting a mortgage or other loan at a good rate.

Planning to build credit wisely in 2025 can look like getting rid of existing debt, never missing a payment, and avoiding unnecessary borrowing. It is also important to try not to carry card balances as they can lead to expensive interest charges.

Using a credit monitoring service is a good way to keep track of your progress.

Bank of America’s 2024 survey also found that only 20% of Gen Z respondents contributed to their retirement savings. While retirement may seem far away if you’re a young adult, you’ll miss out on years of compounding returns and risk not saving enough if you put it off.

While it may seem difficult to put money away for retirement, deciding to regularly contribute a small amount to an IRA, 401(k) or similar account will still help. Plus, this New Year’s resolution has other possible benefits, such as employer 401(k) matches, tax deductions for some retirement contributions, and the savings credit.

The state of the housing market and expensive mortgage interest rates may turn many Gen Zers out of home ownership. But a good New Year’s resolution is to at least look at the costs and benefits of buying a place over the next few years and then make a financial plan if that’s your goal.

Some things to consider are available savings for a down payment and closing costs, mortgage affordability, credit score and real estate prices in the area. If you’re an aspiring Gen Z homeowner, you should also start saving regularly for upfront costs and take steps to build credit, get rid of other debt, and live on a budget.

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