Gen Z, the cohort born between 1997 and 2012, faces unique financial challenges. Many are entering the workforce during a time of high interest rates, an overvalued housing market and persistent inflation, which leaves many young adults viewing their financial futures with pessimism.
For instance, 42% of Gen Z feel they need to earn a healthy six-figure salary to live comfortably, and 41% are still financially dependent on their parents, according to an EduBirdie study. Surprisingly, only 22% feel guilty about relying on their parents — perhaps because the youngest of Gen Z are still in their teens.
While this decade brings unique challenges for young adults entering the workforce, it also presents greater investing opportunities than ever before. The stock market, exchange-traded funds, bonds, crypto and other alternative investments all represent potential paths to wealth. And there are more ways to earn money through the gig economy than ever before.
But all these opportunities and open conversations about money also create confusion. According to the survey, 41% of Gen Z turn to influencers for money tips, while 13% ask ChatGPT for financial advice.
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GOBankingRates asked 18-year-old Anastasia Ghobrial for her top investing questions she would want to ask experts. Ghobrial started working as a salesperson in September 2024 and lives with her parents, giving her opportunities to start saving for the future now.
Like so many people young and old, Ghobrial grapples with the choice of building her emergency savings or focusing on investing for retirement.
“Prioritize your emergency fund first before focusing on retirement savings,” Feinsmith said. “You should have a cushion in case of unexpected costs like medical bills, car repairs or job loss. A good goal is three to six months of essential expenses in an easily accessible savings account. Start with at least $1,000 and build from there.”
“How can I start investing with little money?” Ghobrial asked.
Both experts commended Ghobrial for thinking about money in her teens. “It’s great you are thinking about these financial choices and asking great questions,” Feinsmith said.
“Starting young and letting compounding work for you has a meaningful impact,” Shacklett said. “As you start investing, it is important that you make it easy and repeatable. One way to do this is using your company retirement plan where the money will be automatically drawn out of your paycheck and you won’t even have time to miss it!”
Aside from contributing to an employer-sponsored 401(k) with matching funds, both experts suggested looking into a Roth IRA for tax-free growth.
“I recommend setting up an automatic recurring contribution,” Shacklett said. “I often work with people your age to open Roth IRAs so they can set aside money for tax-free growth. Typically, we start out with small monthly contributions, say $50 per month … A little bit can go a long way if you start young.”
“When I’m ready to work with a brokerage, what should I look for and what questions should I ask?” Ghobrial asked.
Shacklett suggested a large brokerage with no account minimum. “If you wish to invest outside of your retirement plan, the large brokerages like Schwab and Fidelity do not have account minimums and offer access to investments with no minimums,” Shacklett said.
Similarly, Feinsmith advised considering investment fees when choosing a brokerage. “Check with Fidelity, Vanguard or Charles Schwab for suggestions of what to invest in for your risk tolerance and time frame,” Feinsmith said. “Look for brokerages that have a free account and investment fees under 1%.”
In a bull market, investing in stocks is enticing to virtually everyone — including Gen Zers who tend to follow TikTok advice surrounding meme stocks and other risky investments. Ghobrial is a bit more cautious and wants to know what the safest way is to try out the stock market.
“It is widely believed that at least 80% of your portfolio return can be attributed to asset allocation rather than stock selection,” Shacklett said. “So rather than trying to pick individual stocks, we recommend using exchange-traded funds (ETFs), which are made up of a basket of investments and thus provide inherent diversification. They are widely popular thanks to their trading flexibility, low costs and tax efficiencies.”
Feinsmith also suggested that Ghobrial learn about dollar-cost averaging. “You can invest a small, consistent amount, like $10 to $50 a month, instead of putting in a lump sum.”
Feinsmith had one additional piece of advice. “Ignore social media advice about finances and investments,” she said.
Finally, Feinsmith offered some words of encouragement. “Keep asking questions and building confidence and security. Small, consistent steps will have a big impact over time,” she said.
