Gen Z: 5 steps you can take to help improve your financial and emotional health
People who have low financial health are nearly four times as likely to have low emotional health1. Unfortunately, that rings very true for Generation Z (those born between 1997-2012), who report the lowest overall well-being of any generation.2 This relationship between mind and wallet may pose a challenge for the youngest members of today’s workforce.
You’re in a unique position not experienced by previous generations: The feelings of isolation stemming from increasingly digital connections can be compounded by entering the workforce through remote-based jobs during the pandemic.
Here are five small, actionable steps — many of which may even be found at work — that can help you begin to turn the tide towards improving your mind, body, and wallet®.
1. Get covered for whatever life may bring
Enrolling in coverage you can opt into at work, like disability, life, and supplemental health insurance (accident, hospital, or critical illness insurance, for example), can help provide financial support for unforeseen medical events. Ownership rates across all these benefits are low for Gen Z.3 Here’s what you should know about them.
Disability insurance
How it helps: Disability insurance helps protect your income if you become too sick or injured to work.
Did you know? Twenty-five percent of 20-year-olds will have to take a disability-related leave before reaching retirement age.4
Why it’s important: Suffering from an illness or injury that’s serious enough to require taking time off work is one of those things that you never think will happen, until it does. And being prepared helps make sure you’re protected financially. For those looking to start a family, maternity leave is also covered by short-term disability benefits.
Supplemental health insurance
How it helps: Supplemental health benefits consist of hospital indemnity, critical illness, cancer, and accident insurance. The lump sum benefit is paid directly to the policyholder and can be used to reduce or even help prevent the need to choose between paying for your everyday living expenses or paying a medical bill.
Did you know? Only 34% of Gen Z workers believe their medical insurance is enough to help them cover a major medical event.5
Why it’s important: Opting into supplemental health benefits helps to offset the negative financial consequences of high medical bills. Having supplemental health insurance is also correlated with higher self-reported financial health.6
Life insurance
How it helps: It’s a way to help protect your family and those who depend on you for financial support.
Did you know? Only 50% of Gen Z workers own life insurance.7
Where to start: Owning a house or having children are generally the two key motivators for signing up for life insurance. However, if you have financial responsibility (i.e. loans), it’s worth considering during your next open enrollment period. Make sure to also consider things like your student loan debt or leaving money to a charity. These benefits can offer help financial protection and confidence, which can help support both mental and financial wellness. Learn more about the benefits you can get at work, so you’re prepared to make the decision that’s best for your overall well-being during open enrollment.
2. Check out the mental health resources offered at work
Gen Z is often commended for being vocal about mental health and well-being. To meet their expectations, more organizations are stepping up to offer mental health benefits.
How it helps: Employer-sponsored mental health benefits offer access to professional mental health support. Many of these providers offer virtual or in-person therapy, online chat, and mental health resources like articles and apps. If offered, they may be included in your benefits and can be used at no cost to you.
Did you know? Only 23% of Gen Z workers say their emotional health is excellent or very good.8
Why it’s important: Taking the time to focus on your mental health can help you make progress in other areas of your well-being, too.
Where to start: Ask your manager, HR colleague, or search your intranet to learn about the mental health offerings that may be available to you.
3. Build your savings in case of emergencies
High inflation and interest rates have made it difficult for people of all ages to build up emergency funds. We get it. But, while immediate expenses like rent and groceries may be top of mind, developing a plan to start saving may pay off in the long run.
How it helps: Having an emergency fund helps create a financial stability when the unexpected happens, such as losing your job or car or home repairs. It can also help you be more comfortable with spending on more immediate expenses like a once-in-a-lifetime vacation or exciting business opportunity without having to take on debt.
Did you know? Nearly 1 in 5 Gen Z workers say they can afford an emergency expense of only $100 or less.8
Why it’s important: Avoiding debt can help to protect your overall well-being. If you’re concerned about paying off and reducing your debt, you’re twice as likely to report low well-being.9
Where to start: It may seem daunting if you’re living paycheck to paycheck (as are 4 in 10 American workers,10) but the first step is to go back over the past couple months of expenses and learn about your spending habits. The ability to save is greatly impacted by your spending behavior. Then, think about your target savings goal. Ask yourself, “How much would I need to have so three months of living expenses could be covered?” Once you’re able to free up a percentage of each paycheck — say 5% to 15% — start making automated contributions into a dedicated high-yield savings account. Staying consistent will help you get to your goal quicker than you may think!
4. Embrace downtime to reduce stress and beat burnout
Juggling work, maintaining your social life, taking care of your family, and potentially focusing on a side hustle all in a given day, can be a surefire recipe for burnout. Many of the regular demands of your life may feel like they’re tough to break away from, but taking a little time off can help to fend off burnout and reset yourself.
How it helps: Taking a mental health day off, vacation, or even a couple hours to yourself can provide a much-needed chance to pause, regroup, and come back refreshed with greater levels of energy and focus.
Did you know? Seventy-two percent of Gen Z workers report they’ve experienced burnout in the past two years, more than any other generation.11
Why it’s important: Only 48% of working Americans use all the paid time off that’s available to them.12 And that’s not ideal when it comes to your wellness. In fact, 75% of people say that a vacation improves their mental health.13 When you take a break, you’re not shunning your responsibilities, you’re being responsible for your own well-being.
Where to start: Schedule some time off for yourself, whether it be dedicated breaks throughout your workday, a vacation, staycation — whatever is possible right now. If you’re someone who likes to feel productive even during your downtime, two hobbies that may be especially impactful are physical activity and meditation.
5. Look out for future you
Retirement may feel like a far-off fairytale right now, but when the time comes, your future self will be thankful that you started preparing now.
How it helps: Having enough saved can help allow you to enjoy your well-deserved retirement and take part in the things that bring you joy during it.
Did you know? Over half of working Americans are extremely or very concerned that their retirement savings won’t last as long as they need it to, and Gen Z is the most concerned generation.14
Why it’s important: Your retirement may be delayed without adequate savings. You may even have to consider ways to create additional income, such as picking up a part-time job if Social Security benefits and your savings aren’t enough.
Where to start: Starting as early as possible, and staying consistent, may have a significant impact on your retirement savings account because it takes advantage of the power of compounding interest. Many employers offer 401(k) programs that will automatically take a contribution amount that you set out of each paycheck.
If you’re a member of Gen Z, you have so much time ahead of you to get your financial and mental health in shape. Improving it doesn’t have to feel like climbing a mountain. Taking small steps can quickly add up with each positive action building upon the next.