Education | July 21, 2025

Smart Money Habits for Gen Z: How Small Steps Lead to Big Wins


Learn what you can do now to set yourself up for lifelong financial security.

 

Key takeaways:

  • The early years of your career can lay the foundation for a bright financial future, since even small savings can build significant wealth in the decades before you retire. 

  • Achieving financial success starts with finding a budget that works for your lifestyle that you’ll be able to stick to long-term. 

  • You can also work toward your financial goals by making the most of your employer-provided benefits, as well as building your credit history

 

The past decade has seen significant economic ups and downs, from the total shutdown of the pandemic to the subsequent economic boom — and now, the threat of another recession. So if you’re dealing with financial stress, you’re far from alone. Just one in five Gen Z Americans say they feel financially secure today — and half say they’re living paycheck to paycheck. 

But there’s good news, too. With retirement decades on the horizon, and your peak earning years ahead of you, the financial habits you form today can set you up for lifelong financial security. “The smart moves you make now have a massive impact later,” says Reid Segar, District Manager at Northwest Bank. “In your 20s, you can build significant wealth by saving a little money each month. Once you’re in your 40s and 50s, you could have to save thousands each month to get the same results.”

Put simply: Even if you’re struggling now, the future is bright. Here’s how you can set yourself up for success — whether you dream of living debt-free, owning a home or reaching another goal entirely.

 

Build a budget that works

Starting your career (usually) comes with a serious increase in your income compared to when you were in school. And while your first “grown-up” paycheck may make you feel rich, it’s all too easy for your spending to increase accordingly.

Instead, take the opportunity to build financial freedom by setting a budget. “It’s not about restriction, it’s about identifying what matters most to you, and what you want to achieve with your money, then putting each dollar to good use,” explains Segar. 

The secret to successful budgeting is consistency. Make your budget flexible enough to be sustainable, and you’ll be able to stick to it long-term — and reap the financial rewards. 

 

Make the most of your employee benefits — especially your 401(k)

Another bonus to launching your career? Access to employer-provided benefits. 

Taking advantage of the benefits available can directly and indirectly benefit your financial health. Insurance benefits can help provide a safety net to cover the cost of accessing medical care, for example, so you don’t have to tap into your emergency savings every time you go to the doctor. 

If your employer offers 401(k) matching, prioritize contributing enough to your 401(k) to max out your employer’s contribution. For example, if your employer matches 100% of your contributions up to 5% of your annual pay, make sure you contribute at least 5% to maximize the “free money” your employer adds. In essence, you’re doubling the investment in your retirement plan.

“Employer matching is free money — so you want to contribute enough that you’re not leaving money on the table,” says Segar. “Thankfully, your contributions come out of your pre-tax income, so they offer some tax advantages, too.” 

 

Balance debt management with savings

In 2024, Gen Z had an average student loan balance of $22,948 — significantly lower than Millennials, but still a lot to pay back. At the same time, you’ve likely got big plans for the future and need to save in order to achieve them.

So how do you juggle debt and savings? Segar suggests paying yourself first and paying off debt second to keep working toward your goals. “It might seem counterintuitive, but putting money into savings will help you manage your debt long-term. If you run into a financial emergency, you’ll have money saved to help you manage it, so you’re less likely to need to dip back into your debt.”

Segar also suggests automating both your debt payments and your savings, so you don’t need to manually transfer money. That way, you’ll never miss a debt payment — and you’ll never forget to save. 

Pro tip: Some employers offer student loan repayment assistance as part of their employee benefits packages. Consider asking your manager which benefits might be available to help you manage your debts, so you can direct more funds toward other financial goals. 

 

Build your credit score

Finally, the first years of your career are a critical time for your credit. Establishing good credit habits now helps you build up a track record of creditworthiness over time. So when you’re ready to apply for an auto loan or a mortgage, you’re more likely to secure a loan at a favorable rate. 

The most important factor in your credit score is your payment history. So focus on making at least the minimum payment on all your credit accounts — including credit cards, student loans and other debts — on time, every time. Avoid spending up to the credit limit on your cards, as well, since continually maxing out your card can lower your credit score. 

Finally, consider keeping your oldest credit account open, even if it’s a student credit card you don’t necessarily want to use anymore. The longer your credit history, the better you’ll look to potential lenders.  

 

Visit a Northwest Bank financial center for free, personalized support

It’s never too early to seek financial advice — even if you’re still in school or just starting your career. And we’re here to help with convenient, free support. Our financial experts can help you make sense of your paycheck, review your credit and help you create a budget that works, as well as start working toward your savings goals. 

Find a Northwest Bank financial center near you today. We can’t wait to help you build your financial future. 


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