Spend. Save. Give.: Money moves for Gen Z
Your money. Your choices. Your impact.
Think back to your pre-teen and early teen days, when having and earning money made you feel like a rich kid. Whether you found money in your birthday card, or got paid for household chores, babysitting, or cutting grass, it was your money and your decision on what to do with it. Unless your parents said otherwise.
Some of your parents may have shared this three-decision money framework: Spend. Save. Give. For others, it may be a new concept. Either way, now is the time to reflect on what you can do with your money.
Spend on what you want. Save for the future. Give to support others.
Spending on Needs and Wants
Early in your life, you spent on what you wanted while your parents covered your basic needs. Inexpensive toys and candy seemed enjoyable and manageable, until loading up on Robux, buying an adorable American Girl doll, and sporting designer sneakers became your norm. Suddenly, your wants came with bigger price tags.
Your parents may have put the brakes on your ability to buy the latest and greatest on a whim. They may have introduced you to a new reality and tough financial lessons about needs and wants. As you entered your teenage years, money you once spent freely began going toward your own living expenses.
Maybe you started by paying for gas, treating yourself to fast food, or impressing your date with lavish meals and concert tickets. As birthday money ran low or ran out, you started a part-time job to keep it coming in. Adulting hit you fast and furious.
Budgeting: The Dreaded Adulting Concept
The “B” word, budgeting, seemed to appear out of nowhere. This adulting concept introduced the reality of what you can afford.
Budgeting starts with knowing how much money you have coming in and when, and deciding how to make it work for you. A popular budgeting framework, 50/30/20, offers a starting point: 50% to needs, 30% to wants, and 20% to savings, investing, and debt repayment above the required minimum payment. It’s a guide, not a rule. Your financial circumstances determine how much money you allocate to each category.
Your needs, wants, tastes, and preferences strongly influence how much you spend and what you spend on. Do you prefer generic or name-brand personal care and clothing items? Do you do your own hair and nails, or do you go to the salon or barber? Do you enjoy local, free activities, or do you crave city lights and action? Cooking, Uber Eats, or happy hours?
And let’s talk about how you’re tracking your expenses. Overdraft notifications can’t be the only way!
Banks typically let you export a CSV of monthly activity to import into Google Sheets or Microsoft Excel. From there, you can categorize, sort, and tally your spending. If you use AI, remove identifying information and sensitive account details before sharing your data with an AI tool. For ongoing, automated spending tracking, consider budgeting apps with free or paid features, such as Rocket Money, Copilot Money, and Monarch Money. Compare features, costs, and privacy practices before connecting your financial accounts.
Saving for Big and Unknown Expenses
As you explore the 20% allocation to your financial future, start with savings. You may have seen your parents need or use a rainy-day fund for unexpected expenses. Today, your savings options go beyond your local bank to online high-yield savings accounts (HYSAs), which typically pay more interest than traditional checking or savings accounts. When choosing a HYSA, compare interest rates, fees, and deposit insurance.
HYSAs are also for planned expenses. If you like big-ticket items, like concert tickets and airfare, and one or two paychecks won’t cover them, save a little at a time so the purchase doesn’t break the bank or your budget. Don’t be like Miley on Hannah Montana, who turned an emergency credit card into a shopping spree, and learned the price of debt too early!
Expanding Savings to Investing
As your financial knowledge grows, explore investing alongside savings. Investing lets you grow your money for long-term goals. Investing takes time to understand and comes with risk. Unlike eligible deposits at federally insured banks and credit unions, which are protected up to applicable limits, market investments can lose value.
One investment strategy to consider is exploring the approach your parents may use with their employer-sponsored retirement accounts. These plans often offer diversified investments that spread employee payroll contributions across different stocks and bonds. Depending on the plan, these plans may include diversified mutual funds or Exchange Traded Funds (ETFs) that invest in domestic and international markets. Ask your parents about their investment options and what they’ve learned along the way.
You can use a similar approach with a Traditional IRA or Roth IRA if you have eligible compensation and meet applicable IRS income and other requirements, and with a taxable brokerage account for investments outside retirement accounts.
A Traditional IRA may let you deduct contributions today; you generally pay tax on deductible contributions and earnings when you withdraw. A Roth IRA requires after-tax contributions and tax-free withdrawal of earnings in retirement when IRS conditions are met. Investments in taxable brokerage accounts may generate taxes on dividends, interest, and gains when selling investments at a profit.
If you’re employed as an intern or full-time employee with access to a 401(k) or other retirement plan, learn how your employer plan works, including its investment options and any employer matching contributions. Find out when you’re eligible to participate and how much you need to contribute to receive the full employer match, if offered. Once you meet the match, consider increasing your contribution by 1% or more each year as your income increases. The goal is to build toward the annual IRS salary deferral limit as your financial circumstances allow, strengthening your financial future.
Giving and Sharing Your Wealth
Saving helps you prepare for what you know and don’t know. Investing gives your money an opportunity to grow over time. Together, they create a strong financial foundation.
When your dollars compete for your attention, giving can feel out of reach. Giving creates room to invest in others while still investing in yourself. To make room for financial giving, you might set aside 1% of your income, or another amount that fits within your budget, to support a cause that you care about.
If your parents practice tithing, offerings, and other forms of charitable giving, they may set aside more of their income for charitable giving. You determine your giving practices based on your values and evolving financial circumstances.
As you earn more and pay taxes, your giving may generate a financial benefit. Beginning in 2026, the IRS allows eligible taxpayers who don’t itemize their deductions to deduct qualifying cash donations, up to $1,000 for single filers or $2,000 for married couples filing jointly. This deduction reduces your taxable income and may lower the tax you owe. Even if your parents claim you as a dependent, your qualifying donations may lower your federal income tax if you don’t itemize deductions and have income tax to reduce.
Use the IRS Tax Exempt Organization Search to check whether the organization qualifies for a tax-deductible contribution and keep records of your donations. A donation isn't automatically deductible, even if it supports a good cause.
Smart Money Decisions: Spend, Save, Give
The excitement you feel about your money can continue even as your responsibilities increase. It’s satisfying to know you can cover your bills, save for your future, and support what you believe in.
Decide what you need, what you want to enjoy and set aside, and how you want to give. Use your financial tools to take inventory of your income, expenses, what you own (assets), and what you owe (liabilities). When it comes to debt, know how much you owe, what interest you’re paying, and when payments are due. Talk with people you trust, ask questions, and learn from their experiences as you create your own.
Spend to support the life you’re living. Save to create options for your future. Give to help shape the world you want to live in. Spend. Save. Give.
Blog post written by Lazetta Rainey Braxton, MBA, CFP®, TRWC Founder, Visionary Guide & Wealth Strategist.
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