3 Reasons Gen Z Has the Lowest Financial Literacy Levels
Boomers have the money, Gen X doesn't care about the money, millennials don’t know where the money went and Gen Z? Well, they are still figuring out what money is. In today’s multigenerational economy, every age group approaches money differently via their investing strategies and budgeting habits.
However, one pattern keeps showing across all data points: Gen Z has the lowest financial literacy levels in the U.S. While that may sound surprising for a generation that grew up online with unlimited access to information, financial experts say there are several reasons this came to be.
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Financial Literacy Stats for Gen Z
Just to give you a general understanding of what is not necessarily being understood, the tax experts over at Intuit (the company that owns and operates TurboTax) crunched the following numbers on financial literacy for Gen Z:
23% of Gen Z teens report little to no preparation for budgeting, and 20% feel unprepared to handle money scams, which is a big knowledge gap when it comes to financial planning.
71% of Gen Z is negatively impacted by financial stress.
64% of parents with Gen Z children ages 18 to 28 report their children still rely on them for financial support, which strains the parents' own finances and means the younger generation has little to no financial independence
46% of Gen Zers have withdrawn from their retirement savings to pay down debt thanks to the mindset of financial nihilism.
So what’s going on? Here are three major reasons Gen Z has the lowest financial literacy levels in 2026, and why it matters more than ever.
1. Financial Literacy Still Isn’t Taught Consistently in Schools
Simply put, most Gen Z adults were never formally taught how to manage money. While some states are starting to require personal finance education, it’s far from universal. That leaves many young people struggling to learn about credit scores, interest rates, investing basics or taxes.
"Financial literacy isn't something widely taught in high school or college, and many of us didn't grow up in especially financially literate homes," said Michael Broughton, co-founder and former CEO of the recently acquired ALTRO, an app designed to help people gain financial literacy and control. "[Now that we] are in the early stages of taking control of our finances and are experiencing a shift in economic mobility, the term 'financial literacy' can bring up more questions than answers."
Without a strong educational foundation, many Gen Zers are forced to learn through trial and error. And if you are relying solely on social media for financial advice, you can make some costly mistakes early in adulthood.
2. Growing Up Digital Has Changed How Gen Z Interacts With Money
Gen Z is the first generation to grow up almost entirely in a cashless, digital financial world. When figurative numbers are just floating around in the ether, it makes sense that you can’t understand tangible brass tacks. Instead of handling physical money, they mostly interact with credit cards, mobile payments (Apple Pay, Venmo, Cash App) or subscription services and auto‑billing.
"Their predominantly digital interactions with money, such as only using a credit card or paying online, make their experience virtual and limit hands-on experience with managing finances, making it harder to grasp the consequences of financial decisions," said Einat Steklov, co-founder and CEO of Kashable, a financial company that provides employee-based loans.
Steklov said that the digital world Gen Z has grown up in, as well as the economic uncertainty they've had to face in the last few years, has brought on a level of financial unpredictability and skepticism toward traditional planning and investing.
While convenient, when money becomes more abstract and less tangible, managing it in the real world becomes tricky. It has shown true financial consequences around spending, debt and working with compound interest.
2. Economic Uncertainty Has Shaped Gen Z’s Financial Behavior
If you think the world is ending or that nothing really matters, then saving for a rainy day loses some of its urgency. Gen Z has entered adulthood during one of the most financially tumultuous periods in recent history.
They’ve had to navigate pandemic‑driven economic disruptions, high inflation, skyrocketing housing costs and the ever-fluctuating arena that is student loan uncertainty.
"It is hard for Gen Z to think about retirement lifestyle when most of them have not yet entered the workforce," Steklov said, "but it is important to emphasize how critical it is to save for it early on. Mentorship programs and tailored financial products that provide educational resources and real-world learning opportunities can also play significant roles in learning and development."
As a result, many Gen Zers prioritize short‑term financial stability over long‑term wealth building. This could look like keeping money in savings instead of investing or delaying retirement contributions altogether. While these choices or avoiding risk due to uncertainty can feel safer, they can also limit wealth growth over time.
Final Take: Ways To Improve Gen Z's Financial Literacy
One of the biggest ways for Gen Z to improve their financial knowledge is by educating themselves on the basics. This can include learning about different types of credit, how a credit card works or how to open a bank account. Educating yourself on finances can be done through reading personal finance books and blogs, subscribing to financial content, listening to podcasts or talking with a financial professional.
Remember, financial literacy is a skill, and it’s completely learnable. "Even if it's just spending an hour each day with financial literacy content, you'll be on a path to creating a healthy relationship with money, and that's the goal of any financial education," Broughton said.
Justice Petersen contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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