Do Your Debit and Credit Cards Encourage Budget Mistakes
Do you ever wonder how your co-workers, neighbors, or friends manage to own the latest mobile devices, drive late-model cars, and have dinner out several times a week? Some of them may be wizards of financial management, have different household situations (no kids), or a source of income you don’t know about. But there’s a good chance they have those nice things because they’re eyebrow-deep in debt.
The Federal Reserve’s Household Debt and Credit Report for the last quarter of 2013 shows just how much debt Americans have. Outstanding household debt increased $241 billion from the previous quarter – the biggest jump since the third quarter of 2007. Mortgages are the largest component of household debt, but during the fourth quarter of 2013, Americans took on $18 billion in car loan balances and $11 billion in credit card balances. Most people need a car, but the “need” for credit cards is largely based on convenience.
How Credit Cards Make it Easier to Spend
No one denies how convenient credit cards are. And it’s nice to track purchases on one monthly statement, so theoretically, using credit cards exclusively lets you see where you’re spending money. But although your credit card statement shows you spent $67.43 at Target, it doesn’t tell you what items you purchased, and if you don’t have your receipt, you’ve probably forgotten.
People tend to spend more when they use credit cards. Swiping a card is psychologically easier than handing over cash. One study found that spending differences between frugal and non-frugal spenders were smaller when they were required to make purchases with credit cards rather than cash, so even tightwads loosen up when they pay with plastic.
Furthermore, research has shown that credit cards’ mere presence stimulates the desire to spend. One study found that willingness to pay was significantly higher when credit card logos were visible during shopping. This 1980s experiment was replicated two decades later, indicating that credit card logos stimulate consumption, similarly to how the smell of baking bread stimulates visiting the supermarket’s bakery section.
Start now: Get budgeting software from Mint and start tracking spending right now. Click to get started.
Debit cards are safer than credit cards, because they immediately deduct money from your bank account. But even debit cards anesthetize the pain of paying to some degree. The truth is, there’s nothing like handing over cold, hard cash for helping you examine your spending. And when you only carry cash on shopping trips, you’re forced to stick within limits.
Here’s What Happens When You Start Using Cash
When you pay cash, you are forced to consider the purchase price as well as sales taxes, and you have to compare that to your immediate resources – the cash in your wallet. With credit, you may fully intend to pay off your monthly balance (and some people have the discipline to do this), but you still have that option of paying over time if you need to.
The sting of paying cash can help even more with big ticket items. That gorgeous stainless steel refrigerator is less seductive when you know you’ll be handing over $2,000 in cash for it. You might decide your current model will do just fine until it wears out. At worst, when you pay cash for a big ticket item, you may remember that sting of purchase when you use the item, but that can help you appreciate it and your hard-earned money.
The best thing about paying in cash, however, is that it helps you stay out of debt. Debt can snowball easily, and carrying credit cards helps you overspend with little forethought. It’s hard to pass up that flat screen television that’s on sale for a great price, but when you do, you have more money for your mortgage, your children’s educational funds, and consumer debt (like credit card bills) hanging over your head. There’s no substitute for the great feeling of making that final car payment, or paying off a credit card at long last.
Tracking Your Spending
If you want to try using cash for your day-to-day spending, track spending for a month and determine a reasonable weekly “allowance.” Tracking spending is easy with a budgeting app like Mint, which links your accounts to your home computer and your smartphone, so you take your budget with you wherever you are.
You may have to adjust your weekly allowance at first, but once you’re used to paying cash, it almost becomes a game of seeing how much you can have left over at the end of the week. And that money can be put toward debt, or rolled over for next week. Either way, you’ll be chipping away at debt and making your financial future brighter.
Start now: Get budgeting software from Mint and start tracking spending right now. Click to get started.
Even if you frequent the app store, you can’t leave a checking account out of the money picture.
Millennials are glued to their mobile devices for more than just scrolling through social media and snapping selfies. Many millennials use apps and mobile tools to pay their bills and mobile payment services to send and receive money.
“Aside from the convenience of sending money with the tap of a finger, virtual wallets are free to use and offer quick transfers,” says Jennifer McDermott, head of communications and a consumer advocate with Finder.
Virtual wallets—also called digital wallets—offer a way to store different payment information and passwords from multiple accounts in one place.
They even “allow millennials to charge friends in real time, making splitting the costs of meals, gifts and housing easier than ever,” McDermott adds.
Since financial apps and tools are all the rage, do millennials need a checking account? The answer is still a resounding yes.
While there are financial apps to help you manage your money, there are good reasons millennials need a checking account as part of their financial strategy. The challenge is figuring out what millennials want from a checking account that apps simply can’t provide.
What checking accounts do that apps can’t
Checking accounts offer some benefits that digital wallets lack, McDermott says. One reason millennials need a checking account is that you can deposit checks and pay bills from your account. Digital wallets are not necessarily designed for this—they are simply for making purchases or sending money, McDermott ads.
Having a checking account also allows you to utilize direct deposit and skip the hassle of manually depositing each paycheck from your employer. If your account is insured by the FDIC, your money is safeguarded, too—if your bank fails, your deposits are insured up to the maximum amount allowed by law. And while often overlooked, you can even use your checking account as a budgeting tool.
“Checking accounts help you track your spending by reporting debit transactions in real time,” McDermott says. “With a digital wallet, it can be easy to get in the habit of spending money without keeping track of your [checking] account balance. For someone who’s just learning how to take care of their money, that can be an unfortunate habit to fall into.”
If you’re trying to find the right checking account for your lifestyle, a simple checking account can be just what’s needed when you’re in the early stages of financial management, says Mark A. Ranta, head of digital banking solutions at ACI Worldwide, an electronic payments solutions provider.
Traditional checking accounts have evolved to meet the need for easy access through online and mobile banking. “With today’s financial tools, you can see where your money is going and when it’s coming in, all in real time from your mobile device,” Ranta says.
Choosing a checking account
How millennials choose their checking account ties in to what they want from a checking account. Millennials often go online with their finances top-of-mind to:
View statements and transactions
Set up automated, recurring payments
Transfer money electronically to friends and family
Analyze your spending
A good checking account should allow you to do all of these things from your computer or mobile device. You could also add earning rewards to the list of reasons millennials need a checking account.
Discover Cashback Debit allows you to earn 1% cash back on up to $3,000 in debit card purchases each month.1 The incentive to earn cash rewards, which could be used to grow your savings or pay down debt, may factor into how millennials choose their checking account.
Get 1% cashback on Debit from Discover. 1% cashback on up to $3000 in debit card purchases every month. Limitations apply. Excludes Money market accounts.Discover Bank,Member FDIC.Learn More
While there might be some commonalities in what millennials want from a checking account, you also need to consider which features are most important to you personally. Easy access to no-fee ATMs may be a priority for millennials who like to have cash in their wallet at all times, for example. For others, it might be avoiding checking account fees.
“There are so many flavors and options out there that it’s essential to start with asking some simple questions about your individual preferences,” Ranta says.
Making checking accounts and apps work together
While there are reasons millennials need a checking account, it doesn’t mean they have to give up on the idea of using money management apps altogether.
“Using both a checking account and a financial app offers the security and digital benefits you seek when managing your finances,” McDermott says. “By hooking up a checking account to digital payment and budgeting apps, you can easily track your spending and ensure your money is secure, while enjoying the convenience of sending money online and splitting purchases.”
How millennials choose their checking account comes down to personal preference. At the end of the day, the most important thing to consider may be how easily you can coordinate your choice of checking account with your favorite money apps to manage your financial life on the go.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries. Venmo and PayPal are registered trademarks of PayPal, Inc.
As you grow financially, your checking account should be keeping pace with your needs.
Feeling stuck in a checking account rut? Turns out the right checking account for your lifestyle in your 20s may not be a perfect match in your 30s or 40s.
“It can be a mistake to keep the same checking account over the years because things in your life change and you might be missing out on certain benefits by not switching accounts,” says David Bakke, a personal finance expert at financial education site Money Crashers.
According to a survey conducted for Bankrate and MONEY Magazine, the average American adult uses the same primary checking account for about 16 years. While sticking with the same account may make you a loyal customer, as you get older, you may need to change your checking account through life stages.
What is the right checking account for my life stage? These tips can help you find the answer:
Banking in your 20s: Think convenience and cost
In your 20s, the right checking account for your life stage may be one that offers the easiest access to your money.
Forty-seven percent of millennials, for example, use mobile banking to match their active lifestyles, according to a joint survey by Jumio, a company specializing in online mobile payments and identity verification, and Javelin Strategy & Research. But the survey also reveals that young adults don’t want mobile banking to be over-complicated.
“Many banks now offer mobile services,” says Michael E. Diamond, senior vice president and general manager of payments at Mitek, a mobile deposit technology company. “The quality and functionality of these features can vary greatly, however. It’s important to compare the user experience and features of mobile services offered by different financial institutions when considering where to bank.”
Checking account fees may also be a factor when choosing the right checking account for your lifestyle in your 20s.
“Minimal fees should be the first consideration for any 20-something looking for a checking account,” says Eric Patrick, founder of Black Market Exchange, an investment education and entrepreneurship site for young adults. “Saving is extremely important in your 20s because the sooner you start, the better, but hefty bank fees can impede your savings growth.”
If fees are a priority when trying to find the right checking account for your life stage in your 20s, consider opening an account with no monthly fees for maintenance, like Discover Cashback Debit. This account also allows you to earn 1% cash back on up to $3,000 in debit card purchases each month,1 which is a nice perk if you’re a budget-conscious 20-something.
The average American adult uses the same primary checking account for about 16 years.
Banking in your 30s: Focus on features
As you move into your 30s, planning your finances for your life stage may mean accounting for costs associated with new life events, like getting married, buying a home or growing your family.
“Getting married may cause you to want to have a joint checking account,” says Bakke, the personal finance expert from Money Crashers. “And if you’re going to start a family or buy a home, you might want to look for a checking account through a bank that offers financial and savings guidance for those goals.”
Kenneth Scott Perry, an aerospace project manager and baseball blogger, says major life changes have redefined what he needs most from a checking account.
In their early 30s, Perry and his wife bought their first home, purchased two new cars and had their first child, all of which had financial implications. With so many major financial considerations, he started focusing on checking account features like direct deposit for his paychecks, online bill pay services and overdraft protection. “These features, more so than in my 20s, are now very much what I consider to be necessary for the checking account I use at this stage in life.”
Banking in your 40s and 50s: Review your priorities
Planning your finances for your life stage means anticipating how your priorities will change as you get older. For instance, purchasing a second home, ramping up your retirement contributions or caring for aging parents may be on your radar during your 40s and 50s. The right checking account for your lifestyle is one that makes planning for these new scenarios as easy as possible.
When choosing the right checking account for your life stage in your 40s and 50s, you actually might want to consider what kind of savings products your bank offers to complement your checking account—and make sure that moving money into those accounts is both simple and secure. For example, you may want to be able to easily transfer money from your checking account to a savings account, certificate of deposit or IRA. When planning your finances for your life stage you can even explore setting up automatic transfers to different accounts so saving for your latest financial goals can happen on autopilot.
If providing care for your parents becomes a new component of planning your finances for your life stage, you may want to consider opening a joint checking account to help them with financial management and bill payment. You could also open a savings account that’s separate from your emergency fund to help cover any unexpected expenses associated with caregiving.
Don’t just set your checking account and forget it
Having the right checking account for your life stage means regularly assessing your financial needs and how well your checking account is meeting them.
“People tend to review their insurance coverage once each year,” says Diamond, from the mobile deposit technology company Mitek. “Checking account users might want to adopt a similar approach and review their banking options annually.”
If you reach a point where it’s necessary to switch your checking account through life stages, try to avoid costly mistakes.
“It can be a mistake to keep the same checking account over the years because things in your life change and you might be missing out on certain benefits by not switching accounts.”
“When transitioning from an old account to a new one, make sure there isn’t a fee associated with the transfer,” Patrick says. “Make a point to get all the details before starting the process.”
If you find the right checking account for your lifestyle, give yourself time to move your checking account to a new bank. Remember to update your direct deposit information for your new account, as well as any recurring online bill payments or automatic transfers. And most importantly, take time to shop around and compare your options each time you assess your checking account through life stages to find the one that best suits your current banking needs.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
Happiness and financial management are a match made in heaven.
Living on a fixed income has its pros and cons, but you can work both to your advantage. Enhance the good points, work to lessen the not-so-great points, and you’ll create a more stable, comfortable lifestyle.
By definition, fixed incomes don’t vary, at least not by much. The downside is that inflation could impact its value, and you can’t predict to what degree. The best course of action is the same, whether your income is fixed or not: Cut expenses and build up savings. You might have a bit less to work with, but at least you know what you’ve got.
Understand Your Income
Before you can create a workable, fixed-income budget, determine exactly what you’ve got. This should be the simplest step. If you’re using budget software, it’s easier because you can enter the information once, and the software does the rest.
Social Security and pension payments, and any other set, dependable income gets tallied. This lets you reasonably predict your income for weeks, months, and even years into the future. That’s a benefit that people who don’t live on a fixed income can’t enjoy.
Determine Your Monthly Expenses
Everything that you pay for regularly, such as a mortgage, utilities, groceries, vehicle loans and credit cards, are essentially fixed. These are the expenses that you can’t simply cut out. You’re probably living within your means, so determining expenses is just another step toward helping you manage your money more wisely.
If your income doesn’t outweigh your expenses, a good budget can help you reach a more comfortable position. It won’t happen quickly, but you might refinance a loan for a better rate, cut back on utility usage, and even negotiate for reduced interest on credit cards. Watching for sales and clipping coupons can help save more money on groceries than you might realize. MSN Money recommends the 50/30/20 budget plan. Fixed expenses should consume no more than 50 percent of your income.
Calculate Non-Essential Expenses
Anything that you don’t have to spend is non-essential. Dining out, vacations, sending a bit of money to help out a grandson in college, and new landscaping are all expenses that you can change if need be. This is the most challenging part of creating a budget, since non-essentials are sometimes difficult to track, and surprising once you add them up.
Save receipts, especially for cash purchases, and check credit card and bank statements. These all help you see in black and white how much is spent, but more important, Citigroup says they help you see where you can really save money. Using the 50/30/20 plan, trim variable expenses to no more than 30 percent of your income. With budget software, your expenses are in one easy-to read place.
It’s easier than you think.
Start Saving Money
Savings aren’t just for people who are planning for retirement years in the future. Everyone needs a safety net. The money saved from cutting expenses can provide security to cover the unexpected such as a plumbing leak, vehicle repair, broken window, or sprained thumb. As you might expect, the “20 percent” portion of the 50/30/20 plan is dedicated to savings.
MSN Money also recommends that even very low income families need at least $500 in savings for emergencies. It might take months to build, but it could save a great deal of stress later. The more you can cut, the faster you can save. Once you have $500, then you can build savings at a pace that’s more comfortable to you.
Budgeting on a fixed income can help reduce stress, build security, and put you in control of your money. With Mint.com’s budget solutions, it’s easier than ever before, and it’s free.
Sign up for your Mint.com account today, and build a budget that you can live with.
Carole Oldroyd is a freelance writer who helps families develop and stick to a budget.
This is a guest post from the ChamberofCommerce.com
Credit management is more important than ever. Just about every major purchase you ever make is going to be impacted by your credit score.
The IRS has even stepped in with new credit and debit reporting laws hoping to reduce the tax gap.
Understanding your credit report is vital to your business, particularly when you are just starting and need start-up capital.
If you’re like most people, you have heard a lot of things about credit and your credit score. Sadly, most of the things people hear aren’t true. There are tons of myths and false ideas floating around.
These are common beliefs about credit scores but they are all myths you must be aware of.
Prepaid Credit And Debit Cards Boost Your Score
Companies that offer prepaid debit and credit cards do not report to credit bureaus so they do not impact your credit.
If you are in a situation where you need to build or rebuild your credit then think about a secured credit card. These cards require some type of collateral to obtain but as you use them responsibly your credit score increases. Before long you will find yourself obtaining unsecured credit cards.
With secured credit cards, you’ll have to put a cash deposit down, usually between $50 – $500. They have much lower limits, but they are reported to the credit bureaus. If you have an awful credit score, this is a quick and simple way to give it a boost.
Paying Off Negative Debt
Many people are surprised when they pay off a loan that has gone to collection only to find it is still on their credit report two years later. Your credit report encompasses your credit history. Positive and negative entries can remain on your credit report for up to 10 years. To avoid negative debt showing on your credit report, here are tips to avoid business debt and bankruptcy. Make sure to that when you pay off the negative debt, know that it will not automatically disappear from your report.
Here are some other factors to consider:
Credit Inquiries: Despite popular belief, not all credit inquiries impact your score. The two types of inquiries are hard and soft. Hard inquiries are done when you apply for a loan or credit card. These can impact your score but usually only by a few points. Soft inquiries are run when you get those pre-approved credit offers or you pull your credit report. These do not impact your credit.
Closing Credit Accounts: A common misconception is that closing credit accounts you don’t use will increase your credit score. This action can actually decrease your credit score. Having large amounts of credit you are not using looks better on your credit report that only having a few credit cards you use heavily.
Certain Unpaid Bills: While it is true that not all paid or unpaid bills will appear on your credit report, this is completely up to the discretion of the credit company. Mortgages, credit cards, and property management companies commonly report all activity to credit agencies. If you don’t know, ask if they report to credit agencies. Another way to avoid this unknown is not to pay your bills late.
Join Credit Report
This is one of the most common myths that I hear. A lot of people think if you’re married, then you both have one credit score or that you can attach your spouse to your credit score, which will help boost their score.
Each person has their own credit score. Credit reports are linked to Social Security numbers. Even if you’re married, you both have individual numbers.
Although, the items you buy together (i.e. house, car, and credit cards) will impact both credit scores. If you miss a payment, both scores are going to be hit.
I Pay My Bills So I Don’t Need To Check My Credit
This is a dangerous misconception to have. Even if you have never missed or been late with a payment it is vital to check your credit annually. Companies make reporting errors and knowing your credit report will alert you to fraud.
A Large Salary Increases Credit Scores – Large salaries are not the yellow brick road to high credit scores. Paying your bills on time and actively managing your credit is what keeps your score high. It is extremely easy to make large amounts of money and have poor credit.
A Large Savings Account Increases Credit Scores – Bank accounts such as checking and savings are not reported to credit agencies and have no impact on your score. Income from employment, child support, or alimony does not reflect on your credit either.
Where To See Your Credit Report
Knowing what is in your credit report is one of the first steps to sound financial management. There are three agencies that monitor and report credit to lenders.
Knowing the common myths and misconceptions about credit scores and reporting will help you to better manage your personal and business credit. This will make acquiring the credit necessary to run a successful business much easier. Monitor your credit report at least annually and pull from all three bureaus to get the best information.
Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.
Switching bank accounts isn’t as tedious as it may seem. Here’s how to simplify the process.
Do you remember the last time you walked into a physical bank branch? If you can’t, or a bank visit is a rare occurrence, you may be pleased to know there are alternatives if you’re looking to replace your brick-and-mortar checking account. Enter online banking.
“Increasingly, our clients tell us they rarely go to bank branches anymore,” says Andrew Wang, managing partner at Runnymede Capital Management, a financial management firm based out of Mendham, New Jersey.
Wang’s observation is also backed by research. According to a 2018 study by PwC, an accounting services firm, 20 percent of consumers prefer to bank online, another 15 percent prefer to bank from their mobile device and 14 percent prefer to use a combination of both online and mobile banking.
Even if research shows consumers are trending toward digital-only banking, you might still be wondering if online banking is right for you. Learning how to switch banks may feel like a time-consuming process on top of your already packed schedule.
Good news: It’s actually quite easy to move a checking account to a new bank, including to an online bank. And regardless of how simple it is to replace your brick-and-mortar checking account, there are plenty of perks that come with making the switch to online banking that could be worth your while. The digital age has made it pretty straightforward to do things like set up a direct deposit and switch bill pay to a new bank.
If you’re asking, “What are the steps to move my checking account to an online bank?”, consider the following:
Choose the right account and get started
First things first: Why do you want to move your checking account to a new bank? Identifying why you’re making the switch in the first place will help you find an online checking account that meets your needs.
Maybe you want a higher interest rate. Or maybe you want rewards—an account like Discover Cashback Debit lets you earn 1% cash back on up to $3,000 in debit card purchases each month.1 If you’re looking to replace your brick-and-mortar checking account, you’ll also want to consider any potential fees and if your new account has FDIC insurance.
Say hello to cash back on debit card purchases.
No monthly fees. No balance requirements. No, really.
See Details
Discover Bank, Member FDIC
Once you’ve decided which online checking account to open, you’ll need to fill out an application. You may be asked to provide a few basics—like your address and Social Security number—and you can provide a starting balance and fund your account by transferring money from an existing one. You should also find instructions for setting up your online and mobile account access.
From there, it’s time to move on to other aspects of financial management.
Enroll in direct deposit
If you’re determining how to switch banks, consider other features that could help you manage your checking account and budget. Automating your finances, for example, can be an easy way to stay on track toward your financial goals. It helps put systems in place that can all but eliminate human error.
“Systems beat out human beings when it comes to consistency. They don’t get tired or sick or lose motivation,” says Tiffany Aliche, founder of The Budgetnista, a financial education website. “Systems also don’t make irrational financial decisions based on emotion,” she adds. If you have your employer directly deposit your paycheck into your checking account, you don’t run the risk of losing a check (where’d that thing go?) or forgetting to make the deposit on your own.
Sold? Making sure you have direct deposit when you move a checking account to a new bank is easy, whether you’re new to direct deposit or have been using it for some time. You may have to notify your employer and give them an authorization form with your new banking information, including your account and routing numbers. You can get this authorization form from your new bank. Your employer may also have their own form for you to fill out.
Set up bill pay
When you move your checking account to a new bank, you’ll also need to switch bill pay to your new bank so recurring expenses don’t slip through the cracks.
Log into your current checking account and view all of the recurring bill payments you have scheduled. If these have been running on autopilot, it could be easy to forget some of those smaller payments that come out of your checking account on the reg. Next move over to your new online checking account and find the bill pay option, and follow your account’s instructions to set up bill pay for each of your expenses.
Online bill pay is something financial advisor Susan Jensch does with her own accounts.
“Setting up online bill pay has been really beneficial for me because it helps control my cash flow,” she says.
Instead of randomly scheduling her bill payments and running the risk of an overdraft, she makes sure to schedule them right after bi-weekly deposits hit her checking account. This way, she knows there is enough money in the account to cover them.
“It works out that my mortgage and car are paid when the first paycheck hits. My credit card and some other bills come out two weeks later, since those payment dates are more flexible,” Jensch adds.
Schedule automatic transfers
When moving a checking account to a new bank, you may want to consider setting up automatic transfers to your savings account. Aliche, the founder of The Budgetnista, encourages her audience to create multiple savings accounts—one for each goal—and then to set up automatic transfers into each. You may have one automatic transfer into your savings account for your emergency fund, for example, and another transfer set up for your savings account earmarked for vacation expenses.
You can set up your automatic transfers by logging into your online checking account. You’ll need to select which account should receive the transfer, the amount of the transfer and the cadence for the transfer (think weekly, after each paycheck, or monthly).
Replacing your brick-and-mortar checking account
With the streamlined processes that online banks provide, learning how to switch banks is simple. Both Wang and Aliche agree, online banks can provide perks and flexibility that help you automate your finances and reach your financial goals.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries. Venmo and PayPal are registered trademarks of PayPal, Inc.
Although the transition to working from home amid the COVID-19 pandemic was fast and furious for a lot of organizations, many companies are now figuring out that working remotely is the future of work — pandemic or not.
Keeping reading for 23 companies that have switched to long-term remote work, along with some of their recent remote opportunities that have been posted to the FlexJobs database.
1. Amazon
Sundry Photography / Shutterstock.com
As the largest online retailer in the world, Amazon employs nearly 92,000 employees all over the globe and offers traditional and e-books, furniture, household items, apparel, electronics, music, movies, and more.
Remote work plans: Employees whose positions allow them to work from home can do so through June 2021.
Recent remote job openings:
Customer Service Associate
Customer Support Associate
Economist – Advertising Finance
2. American Express
JHVEPhoto / Shutterstock.com
American Express is a global provider of financial goods and services, including payment solutions, travel, and financial management for individuals and businesses.
Remote work plans: Employees can continue working from home through Labor Day 2021.
Recent remote job openings:
Manager – Corporate Communications – Global Supply Management
Business Analyst – Workforce Forecasting – Capacity Planning – Scheduling
Real-Time Analyst
3. Capital One
Isabelle OHara / Shutterstock.com
Capital One, one of the nation’s top 10 largest banks, provides financial services and products for consumers, commercial customers, and small businesses nationwide.
Remote work plans: Capital One plans to keep all non-essential staff working from home until Labor Day 2021.
Recent remote job openings:
Bilingual Collections Associate – Repo
Customer Solutions Specialist
4. Coinbase
Nadezda Murmakova / Shutterstock.com
Coinbase offers cryptocurrency services designed to facilitate transactions in open-source, peer-to-peer digital currencies like bitcoin, ethereum, and litecoin.
Remote work plans: Coinbase has become a “remote-first” company, allowing most staff who want to work remotely to do so indefinitely. Once pandemic restrictions are lifted, employees who want to return to the office will be able to for some or all of their working hours.
Recent remote job openings:
Social Media Manager
Training Lead, Client Services
Group Product Marketing Manager, Consumer
5. Dropbox
Primakov / Shutterstock.com
Dropbox helps people and companies keep files in sync, and share and collaborate on projects anytime and anywhere.
Remote work plans: Dropbox will let all employees work from home permanently. Existing office space will become Dropbox Studios, where people can choose to go in to work.
Recent remote job openings:
Director of Product Management, Business Platform
Senior Director of Product
Sales Compensation Analyst
6. Facebook
Markus Mainka / Shutterstock.com
Founded in 2014, Facebook is the largest social media network worldwide, with more than 2.6 billion monthly active users.
Remote work plans: Facebook will allow up to 50% of their employees to work remotely forever. The rest of the company can remain remote until July 2021.
Recent remote job openings:
Product Designer
Technical Program Manager
7. Hawke Media
fizkes / Shutterstock.com
Hawke Media offers a full range of digital marketing services. It specializes in optimizing digital media strategies to help companies work more efficiently, save money, and generate revenue.
Remote work plans: Hawke Media is now a fully remote company.
Recent remote job openings:
Digital Strategist
Vice President of Creative Operations
8. Infosys
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Information technology and services company Infosys offers services to clients in more than 50 countries worldwide. Infosys solutions include strategic consulting, digital transformation, insights and analytics, business services, engineering services, and finance and accounting.
Remote work plans: Infosys will allow 33% to 50% of its workforce to work from home permanently.
Recent remote job openings:
Underwriting Manager
Post Closer Process Associate
9. Lambda School
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Founded in 2017 as a revolutionary alternative to traditional colleges, Lambda School trains students for high-tech careers with 100% online classes and no up-front costs.
Remote work plans: Lambda School has rolled out a permanent work-from-anywhere policy, and employees can work from anywhere in the U.S.
Recent remote job openings:
Data Analyst
Engineering Manager for Student Products
Marketing Analyst
10. Microsoft
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Microsoft is a multinational technology corporation that develops, manufactures, and markets computer software, consumer electronics, and personal computers.
Remote work plans: Employees can work from home for approximately 50% of their workweek. Managers have the option to approve full-time remote work for staff.
Recent remote job openings:
Senior Business Program Manager, Customer Success
Executive Communications Lead – Storytelling
Customer Engineer
11. Salesforce
Bjorn Bakstad / Money Talks News
Salesforce helps businesses of all shapes and sizes connect with customers using their customer relationship manager.
Remote work plans: Salesforce has declared the 9-to-5 workday dead and now offers three categories of flexible work for employees: Flex (only in the office one to three days per week), fully remote, and office-based (the small number of staff who need to be in-person four to five days per week).
Recent remote job openings:
Accessibility Content Marketing Manager
Account Executive, Public Sector
Enterprise Account Executive
12. Shopify
Paul McKinnon / Shutterstock.com
Shopify is an ecommerce company that provides a multichannel, cloud-based commerce platform for small and midsized companies to design, organize, and manage stores across various sales channels.
Remote work plans: All of Shopify’s 5,000 employees can work from home indefinitely.
Recent remote job openings:
Payroll Manager
Senior Legal Counsel, Product and Commercial
13. Siemens
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Started in 1847, Siemens is a global industrial electrical engineering and electronics corporation that operates nine divisions. Products include industrial controls, energy-efficient building solutions, wind turbines, medical imaging technology, and train and subway solutions.
Remote work plans: 140,000 of Siemens’ employees can permanently work from home for two to three days per week.
Skillshare is an online learning community that services more than 3 million students. Classes cover areas as diverse as design, business, crafts, culinary arts, technology, and film.
Remote work plans: Skillshare is moving to permanent remote work.
Recent remote job openings:
Head of User Research
Content Program Manager
Director of Product, Consumer Experience
15. Slack
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Slack offers real-time messaging, archiving, and search services designed to facilitate team communication so users can quickly and efficiently stream communication and documents to share with colleagues.
Remote work plans: Most Slack employees can work from home permanently, and Slack is committing to hiring more permanently remote employees.
Recent remote job openings:
Senior Product Manager, Conversations, Search and Channels
Senior Product Manager, Monetization
Group Product Manager, Productivity
16. Spotify
Primakov / Shutterstock.com
A Swedish company, Spotify provides music, comedy, podcast, and streaming services. Users can play music directly from the cloud, instead of downloading it to their device, and have access to more than 30 million tracks.
Remote work plans: Spotify recently announced that employees can choose to work in the office, remotely, or in a company-paid coworking space.
Recent remote job openings:
Backend Engineer
17. Square
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Square began as a small credit card-reading application and now provides merchants with the ability to manage point-of-sale systems, accept credit card payments, and sell online.
Remote work plans: Even when offices begin to open, Square employees will be able to work from home permanently.
Recent remote job openings:
Editor, Editorial Strategist, Management
Senior Technical Accounting Manager
Technical Writer
18. Starbucks
Sergey Kohl / Shutterstock.com
A global coffee brand, Starbucks aims to provide an inspiring and nurturing environment in each establishment.
Remote work plans: Starbucks has extended its remote work plan until October 2021.
Recent remote job openings:
Director, Policy and Practice – Inclusion and Diversity
Senior Information Security Engineer – Identity and Access Management
19. Target
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Target is the nation’s second-largest discount store retailer and operates over 1,800 stores in 47 states.
Remote work plans: Employees in the Minnesota headquarters can continue working remotely until June 2021, with plans for a long-term hybrid model.
Recent remote job openings:
Lead Data Analyst, Talent Analytics
Senior Data Analyst, Talent Analytics
20. Twitter
Michael Vi / Shutterstock.com
Twitter is an online social networking and news service that allows people to post messages and interact with others instantly around the world using short messages.
Remote work plans: Employees at Twitter will be able to work from home indefinitely, going into the office if and when they choose.
Recent remote job openings:
Senior – Staff Researcher – Creator Experience
Conversation Lead
Senior Researcher – Media Experience
21. Upwork
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Upwork is the world’s largest freelance marketplace offering 2,500 skill categories, with 10 million registered freelancers and 4 million registered client companies.
Remote work plans: Upwork is permanently adopting a remote-first model, with remote work being the default for all employees.
Recent remote job openings:
Senior Product Designer
Senior Content Designer
Directory, Diversity Change Management
22. VMware
Michael Vi / Shutterstock.com
A subsidiary of Dell, VMware specializes in cloud and virtualization software and services. Its products and services include data center and cloud infrastructure, networking and security, storage and availability, cloud management, and more.
Remote work plans: VMware is offering permanent, remote work to all employees.
Recent remote job openings:
Senior Open Source Community Manager
Senior Product Manager
Senior Customer Service Engineer, Tanzu Observability
23. Zipwhip
antoniodiaz / Shutterstock.com
Zipwhip is a Software-as-a-Service (SaaS) company that provides software to text-enabled phone numbers by adding texting to existing landlines, toll-free phone numbers, and VoIP.
Remote work plans: Zipwhip has extended its work-from-home policy for all employees through July 2021.
Recent remote job openings:
Senior Software Engineer – Android
Senior Software Engineer – Mobile and Services
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Generation Z—the 18 to 24 year old digital natives born who can’t recall a world without smartphones and rapid technology—now make up 20 percent of the U.S. population. Born after 1997, this cohort is making their mark in the economy as they spend an estimated $143 billion per year. The eldest members are in their early 20s, graduating college and entering the workforce for the first time.
This generation differs greatly from their predecessors in saving, spending and overall money management habits, as well as what they value most in the brands they interact with, the type of jobs they’re after, and their goals for the future.
Here are a few key characteristics of this generation:
Their ability to find answers quickly by accessing information online enables them to make informed decisions and become smart shoppers.
Many have called this generation the most financially savvy because of their keenness for saving paired with their thrifty, entrepreneurial spirits.
Their sense of independence and self-reliance is partially because of the digital world they grew up in—many received their first mobile device by the age of 10.
Read on to learn more about Generation Z’s spending habits and their other financial patterns as we enter 2021.
How Generation Z Shops Online and Offline
Generation Z is known as the first digitally native generation and does not differentiate between online and offline channels. Having grown up in a hyperconnected world, they expect the same quality and speed of an online channel to translate to the physical stores they visit. They’re also much savvier with online shopping channels than their predecessors and aren’t easily swayed by gimmicks or celebrity influencers. Take a look at how Gen Z shops.
Online Shopping Habits
Since this generation never knew a world without the internet, they have high expectations for online channels and a low tolerance for any slowdowns or glitches. Members of this cohort place a high value on technology and having the information they need at their fingertips.
They’re also skeptical about giving away their information since they’ve grown up in an age of high-profile data breaches for major brands. Read through our stats below to learn how Gen Z behaves online:
26 percent of Gen Z report using social media to make a purchase in 2020. [Source: National Retail Federation]
Only 25 percent of Gen Z said they feel in control of their data online in 2020. [Source: Global Web Index]
60 percent of Gen Z would prefer to keep their data over exchanging it for free services in 2020. [Source: Global Web Index]
Gen Z reports spending around four and a half hours on their mobile devices per day in 2020. [Source: Global Web Index]
Gen Z reports spending a little over three and a half hours per day on their laptops in 2020. [Source: Global Web Index]
Gen Z spent over 8 hours a day online in 2020. [Source: Global Web Index]
28 percent of Gen Z consider a simple online checkout experience as a purchase driver in 2020. [Source: Global Web Index]
58 percent of Gen Z report free delivery as a major purchase driver in 2020. [Source: Global Web Index]
43 percent of Gen Z cite coupons and discounts as a major purchase driver in 2020. [Source: Global Web Index]
72 percent of Gen Z reports purchasing an item online in the last month at the time of being surveyed in 2019, whether on a computer or their mobile device. [Source: Global Web Index]
41 percent of Gen Z paid for a purchase using their mobile phone in 2019. [Source: Global Web Index]
At the time of being surveyed in 2019, 80 percent of Gen Z said they browsed an online retail store in the last month using a mobile device. [Source: Global Web Index]
At the time of being surveyed in 2019, 56 percent of Gen Z said they browsed an online retail store in the last month using a PC or laptop. [Source: Global Web Index]
At the time of being surveyed in 2019, 73 percent of Gen Z said they used a mobile device in the last month to search for an item they wanted to buy. [Source: Global Web Index]
At the time of being surveyed in 2019, 41 percent of Gen Z said they used a PC or laptop in the last month to search for an item they wanted to buy. [Source: Global Web Index]
A poor shopping experience prevented 22 percent of Gen Z from making a purchase online at least three to four times in 2019. [Source: Kearney]
82 percent of Gen Z said that peer reviews were extremely important to them when shopping online in 2019. [Source: Kearney]
77 percent of Gen Z said that personalized recommendations were extremely important to them when shopping online in 2019. [Source: Kearney]
62 percent of Gen Z report being worried about how companies use their personal data in 2019. [Source: Global Web Index]
At the time of being surveyed in 2019, 61 percent of Gen Z said they made a purchase online in the last month using a mobile device. [Source: Global Web Index]
At the time of being surveyed in 2019, 32 percent of Gen Z said they made a purchase online in the last month using a PC or laptop. [Source: Global Web Index]
46 percent of Gen Z said they had used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
Only 26 percent of Gen Z said they were comfortable with their apps tracking their activity in 2020. [Source: Global Web Index]
62 percent of Gen Z reported using a private browsing window in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
50 percent of Gen Z reported deleting cookies online in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
33 percent of Gen Z reported using a VPN or Proxy Server in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
Of the Gen Z who used an ad-blocker in 2019, 49 percent report doing so because they thought there were too many ads online. [Source: Global Web Index]
23 percent of Gen Z said they blocked ads in 2019 because they were annoying or irrelevant. [Source: Global Web Index]
40 percent of Gen Z reported using another device to shop online while watching TV in 2019. [Source: Global Web Index]
Brick-and-Mortar Shopping Habits
Contrary to what you might think, the majority of Gen Z prefers to make purchases in store. One reason could be that they lack access to credit cards to make online purchases (although they do use debit cards.) We may see this preference change over time.
However, it’s important to note that members of Generation Z are not blinded by technological “bells and whistles” with any shopping channel. Their priorities lie in the basic retail experience: product availability, quality products and efficient service. While they may be swayed as long as any addition enhances the shopping experience, they have a low tolerance for negative or inefficient experiences while they shop. Read on to see what expectations Gen Z has for their brick-and-mortar shopping trips:
Contrary to the nickname of “digital nomads” that many have dubbed them with, 81 percent of Gen Z still said they like shopping in-store in 2019. [Source: Kearney]
74 percent of Gen Z cited a “well curated store experience focused on a limited number of products” as either extremely or moderately important to them in 2019. [Source: Kearney]
73 percent of Gen Z said they utilize shopping in-store as a way to discover new products in 2019. [Source: Kearney]
65 percent of Gen Z said they preferred shopping at brick-and-mortar stores in order to trial purchases in 2019. [Source: Kearney]
55 percent of Gen said they planned to do their holiday shopping at brick-and-mortar stores in 2019. [Source: Shopkick via Retail Dive]
When asked what they want in a brick-and-mortar store, 83 percent of Gen Z reported having access to things like maps and kiosks was either extremely or moderately important to them in 2019. [Source: Kearney]
79 percent of Gen Z believe that security elements (such as guards) are important in a brick-and-mortar environment. [Source: Kearney]
86 percent of Gen Z said they’re after special promotions, like free samples and giveaways, in the brick-and-mortar stores they visit. [Source: Kearney]
A poor shopping experience prevented 24 percent of Gen Z from making a purchase in store at least three to four times in 2019. [Source: Kearney]
8 percent of Gen Z said a poor shopping experience prevented them from making a purchase in store at least five to ten times in 2019. [Source: Kearney]
66 percent of Gen Z said they’d be inclined to shop at physical stores offering technology that enhanced their shopping experience. [Source: Kearney]
72 percent of Gen Z want retail technology that can lessen the time they spend standing in line. [Source: Kearney]
61 percent of Gen Z would like retail technology that streamlines the process of finding the products they’re looking for in stores. [Source: Kearney]
58 percent of Gen Z said they use shopping in-store as a way to disconnect from social media in 2019. [Source: Kearney]
How Gen Z Views Brands
Members of Generation Z expect brands to be transparent, ethical and responsible in all aspects of their business. Neglecting to do so can result in a lost opportunity to collect information or lost business altogether from this generation.
Generation Z cares far more about the value and quality of their purchases than their loyalty to the brand that makes them, so brands need to work extra hard to keep Gen Z’s business around. Take a look at the different brand preferences Gen Z has and what they expect from today’s brands:
72 percent of Gen Z said they’d more readily make a purchase from brands they follow on social media in 2020. [Source: National Retail Federation]
47 percent of the Gen Zers following brands on Instagram in 2020 have purchased something directly through the platform. [Source: National Retail Federation]
23 percent of Gen Z report following social media accounts or brands they might make a purchase from in 2020. [Source: Global Web Index]
A nod to their proposed lack of brand loyalty, Gen Z is 22 percent more likely to unfollow a brand online. [Source: Global Web Index]
75 percent of Gen Z said they engage with brands on Instagram in 2020. [Source: National Retail Federation]
Only 15 percent of Gen Z feel represented in the brand advertisements they see in 2020. [Source: Global Web Index]
56 percent of Gen Z believe brands should be innovative in 2020. [Source: Global Web Index]
38 percent of Gen Z believes brands should be young in 2020. [Source: Global Web Index]
42 percent of Gen Z believe brands should be trendy or cool in 2020. [Source: Global Web Index]
40 percent of Gen Z believe brands should make you feel valued in 2020. [Source: Global Web Index]
35 percent of Gen Z believe brands should offer customized products that are personalized to their needs in 2020. [Source: Global Web Index]
33 percent of Gen Z believe brands should support charities in 2020. [Source: Global Web Index]
58 percent of Gen Z prefer their purchases to come in eco-friendly packaging. [Source: Kearney]
60 percent of Gen Z said that endorsements on social media from non-celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
51 percent of Gen Z said that endorsements on social media from celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
83 percent of Gen Z said no matter what level of trust they hold for a brand, they still do their research before purchasing from them. [Source: IBM]
57 percent of Gen Z said they want their purchases to be environmentally sustainable in 2019. [Source: Kearney]
50 percent of Gen Z said they’re after locally sourced products in 2019. [Source: Kearney]
79 percent of Gen Z cited health and wellness benefits as important to them when choosing what to buy. [Source: IBM]
71 percent of Gen Z cited natural or organic ingredients as important to them when choosing what to buy. [Source: IBM]
Financial Habits
Despite their young age, Generation Z holds $34 billion in buying power alone in 2020, and influenced household spending to the tune of $600 billion. In addition to their own dollars, they also exercise a lot of influence over their households. Their digital savviness comes into play once again in this area. Their expertise enables them to guide their families through different purchase phases, from initial product evaluation to the final purchase itself.
Members of Gen Z are also financially savvy and keen on earning money, even at their young age. Freedom and flexibility at work are key values of this generation, and the job opportunities they flock to will be those that offer work-life balance and some level of autonomy over their schedule.
Gen Z had an average of $115 in spending money each month in 2020. [Source: YPulse]
36 percent of the 2020 workforce was projected to be made up by Gen Z employees. [Source: Financial Executives International]
68 percent of Gen Z used some form of budgeting system in 2020. [Source: Nerd Wallet]
30 percent of Gen Z had credit card debt in 2020. [Source: Nerd Wallet]
87 percent of parents said their Gen Z children had a level of influence over the purchases they made in 2019, whether for the household or for their children. Source: [National Retail Federation]
Gen Z kids influenced 48 percent of purchases their parents made for them in 2019. [Source: National Retail Federation]
Gen Z kids influenced 36 percent of household purchases made by their parents in 2019. [Source: National Retail Federation]
Gen Z reported wanting to work in interactive work environments that provide flexibility and work life balance in 2019. [Source: Workforce Institute]
32 percent of Gen Z said they’re the hardest working generation in 2019. [Source: Workforce Institute]
26 percent of Gen Z said they’d be willing to work longer hours in return for a flexible work schedule in 2019. [Source: Workforce Institute]
31 percent of Gen Z reported feeling hopeful about their future of work in the U.S. in 2019. [Source: Workforce Institute]
57 percent of Gen Z reported expectations of being promoted at least once per year in 2019. [Source: Workforce Institute]
44 percent of Gen Z said they value good healthcare coverage from their employer over paid time off in 2019. [Source: Workforce Institute]
Many Gen Z cohorts say they would prefer to do gig work, and 46 percent of them took on some form of gig work in 2019. [Source: Workforce Institute]
Only 10 percent of Gen Z solely worked gig jobs in 2019. [Source: Workforce Institute]
18 percent of Gen Z worked part time gig work in 2019. [Source: Workforce Institute]
18 percent of Gen Z took on gig work in addition to another job in 2019. [Source: Workforce Institute]
Gen Z vs. Millennials
Millennials have been center stage for many years, and understandably so—they recently became America’s largest generation, reaching 72.1 million, surpassing the 70 million Baby Boomers living in the U.S. As Millennials begin to age out, however, Generation Z is beginning to capture the world’s attention with their different spending, saving and earning habits. Millennial spending habits differ quite a bit from their Gen Z counterparts. This is partially because Gen Z is very price conscious and focuses on overall value when making buying decisions. We can see these differences when comparing preferences and priorities with different products and services.
While 55 percent of Gen Z said they planned to do their holiday shopping at brick-and-mortar stores, 32 percent of Millennials said they planned to do their holiday shopping through their mobile phones. [Source: Shopkick via Retail Dive]
75 percent of millennials are willing to pay more for great customer experiences compared to 69 percent of Gen Z. [Source: Salesforce]
While 76 percent of Millennials cited natural or organic ingredients as important in the products they purchase, only 71 percent of Gen Z said the same. [Source: IBM]
While 79 percent of Millennials cited sustainability as important in the products they purchase, only 75 percent of Gen Z said the same. [Source: IBM]
While 81 percent of Millennials cited purchasing “clean” products as important to them, only 75 percent of Gen Z said the same. [Source: IBM]
While 78 percent of Millennials cited purchasing products that support recycling as important to them, only 72 percent of Gen Z said the same. [Source: IBM]
Millennials and Gen Z share similar habits when it comes to data privacy: 31 percent of Millennials and 33 percent of Gen Z said they used a VPN or Proxy Server inthe last month at the time of being surveyed in 2020. [Source: Global Web Index]
Similarly, 45 of Millennials and 46 percent of Gen Z said they used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
The 67.7 billion members of this generation are a group to watch as they grow up and enter the workforce. Their financial management looks to be off to a strong start thanks to their frugal mindsets and entrepreneurial attitudes. They’ve proven so far that they’re ready to responsibly make and manage their money, and that they have high expectations when it comes to what they spend it on.
Teens and young adults who are after a financially successful future should not only make plans to keep down debt, but also learn how to build and manage their credit. This includes applying for credit cards, keeping payments down and checking your credit report often to make sure everything is accurate. If you do find any inaccuracies on your credit report like an account you don’t recognize, you can call to learn about how Lexington Law’s credit repair services can help clean up your credit report.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Generation Z—the 18 to 24 year old digital natives born who can’t recall a world without smartphones and rapid technology—now make up 20 percent of the U.S. population. Born after 1997, this cohort is making their mark in the economy as they spend an estimated $143 billion per year. The eldest members are in their early 20s, graduating college and entering the workforce for the first time.
This generation differs greatly from their predecessors in saving, spending and overall money management habits, as well as what they value most in the brands they interact with, the type of jobs they’re after, and their goals for the future.
Here are a few key characteristics of this generation:
Their ability to find answers quickly by accessing information online enables them to make informed decisions and become smart shoppers.
Many have called this generation the most financially savvy because of their keenness for saving paired with their thrifty, entrepreneurial spirits.
Their sense of independence and self-reliance is partially because of the digital world they grew up in—many received their first mobile device by the age of 10.
Read on to learn more about Generation Z’s spending habits and their other financial patterns as we enter 2021.
How Generation Z Shops Online and Offline
Generation Z is known as the first digitally native generation and does not differentiate between online and offline channels. Having grown up in a hyperconnected world, they expect the same quality and speed of an online channel to translate to the physical stores they visit. They’re also much savvier with online shopping channels than their predecessors and aren’t easily swayed by gimmicks or celebrity influencers. Take a look at how Gen Z shops.
Online Shopping Habits
Since this generation never knew a world without the internet, they have high expectations for online channels and a low tolerance for any slowdowns or glitches. Members of this cohort place a high value on technology and having the information they need at their fingertips.
They’re also skeptical about giving away their information since they’ve grown up in an age of high-profile data breaches for major brands. Read through our stats below to learn how Gen Z behaves online:
26 percent of Gen Z report using social media to make a purchase in 2020. [Source: National Retail Federation]
Only 25 percent of Gen Z said they feel in control of their data online in 2020. [Source: Global Web Index]
60 percent of Gen Z would prefer to keep their data over exchanging it for free services in 2020. [Source: Global Web Index]
Gen Z reports spending around four and a half hours on their mobile devices per day in 2020. [Source: Global Web Index]
Gen Z reports spending a little over three and a half hours per day on their laptops in 2020. [Source: Global Web Index]
Gen Z spent over 8 hours a day online in 2020. [Source: Global Web Index]
28 percent of Gen Z consider a simple online checkout experience as a purchase driver in 2020. [Source: Global Web Index]
58 percent of Gen Z report free delivery as a major purchase driver in 2020. [Source: Global Web Index]
43 percent of Gen Z cite coupons and discounts as a major purchase driver in 2020. [Source: Global Web Index]
72 percent of Gen Z reports purchasing an item online in the last month at the time of being surveyed in 2019, whether on a computer or their mobile device. [Source: Global Web Index]
41 percent of Gen Z paid for a purchase using their mobile phone in 2019. [Source: Global Web Index]
At the time of being surveyed in 2019, 80 percent of Gen Z said they browsed an online retail store in the last month using a mobile device. [Source: Global Web Index]
At the time of being surveyed in 2019, 56 percent of Gen Z said they browsed an online retail store in the last month using a PC or laptop. [Source: Global Web Index]
At the time of being surveyed in 2019, 73 percent of Gen Z said they used a mobile device in the last month to search for an item they wanted to buy. [Source: Global Web Index]
At the time of being surveyed in 2019, 41 percent of Gen Z said they used a PC or laptop in the last month to search for an item they wanted to buy. [Source: Global Web Index]
A poor shopping experience prevented 22 percent of Gen Z from making a purchase online at least three to four times in 2019. [Source: Kearney]
82 percent of Gen Z said that peer reviews were extremely important to them when shopping online in 2019. [Source: Kearney]
77 percent of Gen Z said that personalized recommendations were extremely important to them when shopping online in 2019. [Source: Kearney]
62 percent of Gen Z report being worried about how companies use their personal data in 2019. [Source: Global Web Index]
At the time of being surveyed in 2019, 61 percent of Gen Z said they made a purchase online in the last month using a mobile device. [Source: Global Web Index]
At the time of being surveyed in 2019, 32 percent of Gen Z said they made a purchase online in the last month using a PC or laptop. [Source: Global Web Index]
46 percent of Gen Z said they had used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
Only 26 percent of Gen Z said they were comfortable with their apps tracking their activity in 2020. [Source: Global Web Index]
62 percent of Gen Z reported using a private browsing window in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
50 percent of Gen Z reported deleting cookies online in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
33 percent of Gen Z reported using a VPN or Proxy Server in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
Of the Gen Z who used an ad-blocker in 2019, 49 percent report doing so because they thought there were too many ads online. [Source: Global Web Index]
23 percent of Gen Z said they blocked ads in 2019 because they were annoying or irrelevant. [Source: Global Web Index]
40 percent of Gen Z reported using another device to shop online while watching TV in 2019. [Source: Global Web Index]
Brick-and-Mortar Shopping Habits
Contrary to what you might think, the majority of Gen Z prefers to make purchases in store. One reason could be that they lack access to credit cards to make online purchases (although they do use debit cards.) We may see this preference change over time.
However, it’s important to note that members of Generation Z are not blinded by technological “bells and whistles” with any shopping channel. Their priorities lie in the basic retail experience: product availability, quality products and efficient service. While they may be swayed as long as any addition enhances the shopping experience, they have a low tolerance for negative or inefficient experiences while they shop. Read on to see what expectations Gen Z has for their brick-and-mortar shopping trips:
Contrary to the nickname of “digital nomads” that many have dubbed them with, 81 percent of Gen Z still said they like shopping in-store in 2019. [Source: Kearney]
74 percent of Gen Z cited a “well curated store experience focused on a limited number of products” as either extremely or moderately important to them in 2019. [Source: Kearney]
73 percent of Gen Z said they utilize shopping in-store as a way to discover new products in 2019. [Source: Kearney]
65 percent of Gen Z said they preferred shopping at brick-and-mortar stores in order to trial purchases in 2019. [Source: Kearney]
55 percent of Gen said they planned to do their holiday shopping at brick-and-mortar stores in 2019. [Source: Shopkick via Retail Dive]
When asked what they want in a brick-and-mortar store, 83 percent of Gen Z reported having access to things like maps and kiosks was either extremely or moderately important to them in 2019. [Source: Kearney]
79 percent of Gen Z believe that security elements (such as guards) are important in a brick-and-mortar environment. [Source: Kearney]
86 percent of Gen Z said they’re after special promotions, like free samples and giveaways, in the brick-and-mortar stores they visit. [Source: Kearney]
A poor shopping experience prevented 24 percent of Gen Z from making a purchase in store at least three to four times in 2019. [Source: Kearney]
8 percent of Gen Z said a poor shopping experience prevented them from making a purchase in store at least five to ten times in 2019. [Source: Kearney]
66 percent of Gen Z said they’d be inclined to shop at physical stores offering technology that enhanced their shopping experience. [Source: Kearney]
72 percent of Gen Z want retail technology that can lessen the time they spend standing in line. [Source: Kearney]
61 percent of Gen Z would like retail technology that streamlines the process of finding the products they’re looking for in stores. [Source: Kearney]
58 percent of Gen Z said they use shopping in-store as a way to disconnect from social media in 2019. [Source: Kearney]
How Gen Z Views Brands
Members of Generation Z expect brands to be transparent, ethical and responsible in all aspects of their business. Neglecting to do so can result in a lost opportunity to collect information or lost business altogether from this generation.
Generation Z cares far more about the value and quality of their purchases than their loyalty to the brand that makes them, so brands need to work extra hard to keep Gen Z’s business around. Take a look at the different brand preferences Gen Z has and what they expect from today’s brands:
72 percent of Gen Z said they’d more readily make a purchase from brands they follow on social media in 2020. [Source: National Retail Federation]
47 percent of the Gen Zers following brands on Instagram in 2020 have purchased something directly through the platform. [Source: National Retail Federation]
23 percent of Gen Z report following social media accounts or brands they might make a purchase from in 2020. [Source: Global Web Index]
A nod to their proposed lack of brand loyalty, Gen Z is 22 percent more likely to unfollow a brand online. [Source: Global Web Index]
75 percent of Gen Z said they engage with brands on Instagram in 2020. [Source: National Retail Federation]
Only 15 percent of Gen Z feel represented in the brand advertisements they see in 2020. [Source: Global Web Index]
56 percent of Gen Z believe brands should be innovative in 2020. [Source: Global Web Index]
38 percent of Gen Z believes brands should be young in 2020. [Source: Global Web Index]
42 percent of Gen Z believe brands should be trendy or cool in 2020. [Source: Global Web Index]
40 percent of Gen Z believe brands should make you feel valued in 2020. [Source: Global Web Index]
35 percent of Gen Z believe brands should offer customized products that are personalized to their needs in 2020. [Source: Global Web Index]
33 percent of Gen Z believe brands should support charities in 2020. [Source: Global Web Index]
58 percent of Gen Z prefer their purchases to come in eco-friendly packaging. [Source: Kearney]
60 percent of Gen Z said that endorsements on social media from non-celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
51 percent of Gen Z said that endorsements on social media from celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
83 percent of Gen Z said no matter what level of trust they hold for a brand, they still do their research before purchasing from them. [Source: IBM]
57 percent of Gen Z said they want their purchases to be environmentally sustainable in 2019. [Source: Kearney]
50 percent of Gen Z said they’re after locally sourced products in 2019. [Source: Kearney]
79 percent of Gen Z cited health and wellness benefits as important to them when choosing what to buy. [Source: IBM]
71 percent of Gen Z cited natural or organic ingredients as important to them when choosing what to buy. [Source: IBM]
Financial Habits
Despite their young age, Generation Z holds $34 billion in buying power alone in 2020, and influenced household spending to the tune of $600 billion. In addition to their own dollars, they also exercise a lot of influence over their households. Their digital savviness comes into play once again in this area. Their expertise enables them to guide their families through different purchase phases, from initial product evaluation to the final purchase itself.
Members of Gen Z are also financially savvy and keen on earning money, even at their young age. Freedom and flexibility at work are key values of this generation, and the job opportunities they flock to will be those that offer work-life balance and some level of autonomy over their schedule.
Gen Z had an average of $115 in spending money each month in 2020. [Source: YPulse]
36 percent of the 2020 workforce was projected to be made up by Gen Z employees. [Source: Financial Executives International]
68 percent of Gen Z used some form of budgeting system in 2020. [Source: Nerd Wallet]
30 percent of Gen Z had credit card debt in 2020. [Source: Nerd Wallet]
87 percent of parents said their Gen Z children had a level of influence over the purchases they made in 2019, whether for the household or for their children. Source: [National Retail Federation]
Gen Z kids influenced 48 percent of purchases their parents made for them in 2019. [Source: National Retail Federation]
Gen Z kids influenced 36 percent of household purchases made by their parents in 2019. [Source: National Retail Federation]
Gen Z reported wanting to work in interactive work environments that provide flexibility and work life balance in 2019. [Source: Workforce Institute]
32 percent of Gen Z said they’re the hardest working generation in 2019. [Source: Workforce Institute]
26 percent of Gen Z said they’d be willing to work longer hours in return for a flexible work schedule in 2019. [Source: Workforce Institute]
31 percent of Gen Z reported feeling hopeful about their future of work in the U.S. in 2019. [Source: Workforce Institute]
57 percent of Gen Z reported expectations of being promoted at least once per year in 2019. [Source: Workforce Institute]
44 percent of Gen Z said they value good healthcare coverage from their employer over paid time off in 2019. [Source: Workforce Institute]
Many Gen Z cohorts say they would prefer to do gig work, and 46 percent of them took on some form of gig work in 2019. [Source: Workforce Institute]
Only 10 percent of Gen Z solely worked gig jobs in 2019. [Source: Workforce Institute]
18 percent of Gen Z worked part time gig work in 2019. [Source: Workforce Institute]
18 percent of Gen Z took on gig work in addition to another job in 2019. [Source: Workforce Institute]
Gen Z vs. Millennials
Millennials have been center stage for many years, and understandably so—they recently became America’s largest generation, reaching 72.1 million, surpassing the 70 million Baby Boomers living in the U.S. As Millennials begin to age out, however, Generation Z is beginning to capture the world’s attention with their different spending, saving and earning habits. Millennial spending habits differ quite a bit from their Gen Z counterparts. This is partially because Gen Z is very price conscious and focuses on overall value when making buying decisions. We can see these differences when comparing preferences and priorities with different products and services.
While 55 percent of Gen Z said they planned to do their holiday shopping at brick-and-mortar stores, 32 percent of Millennials said they planned to do their holiday shopping through their mobile phones. [Source: Shopkick via Retail Dive]
75 percent of millennials are willing to pay more for great customer experiences compared to 69 percent of Gen Z. [Source: Salesforce]
While 76 percent of Millennials cited natural or organic ingredients as important in the products they purchase, only 71 percent of Gen Z said the same. [Source: IBM]
While 79 percent of Millennials cited sustainability as important in the products they purchase, only 75 percent of Gen Z said the same. [Source: IBM]
While 81 percent of Millennials cited purchasing “clean” products as important to them, only 75 percent of Gen Z said the same. [Source: IBM]
While 78 percent of Millennials cited purchasing products that support recycling as important to them, only 72 percent of Gen Z said the same. [Source: IBM]
Millennials and Gen Z share similar habits when it comes to data privacy: 31 percent of Millennials and 33 percent of Gen Z said they used a VPN or Proxy Server inthe last month at the time of being surveyed in 2020. [Source: Global Web Index]
Similarly, 45 of Millennials and 46 percent of Gen Z said they used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
The 67.7 billion members of this generation are a group to watch as they grow up and enter the workforce. Their financial management looks to be off to a strong start thanks to their frugal mindsets and entrepreneurial attitudes. They’ve proven so far that they’re ready to responsibly make and manage their money, and that they have high expectations when it comes to what they spend it on.
Teens and young adults who are after a financially successful future should not only make plans to keep down debt, but also learn how to build and manage their credit. This includes applying for credit cards, keeping payments down and checking your credit report often to make sure everything is accurate. If you do find any inaccuracies on your credit report like an account you don’t recognize, you can call to learn about how Lexington Law’s credit repair services can help clean up your credit report.
Former U.S. Bancorp Chairman John “Jack” Grundhofer, who turned around a struggling bank in Minneapolis and built it into what would become one of the country’s largest financial companies, died Sunday at 82.
Grundhofer was a prominent California banker rising through the ranks at Wells Fargo when he was recruited to help turn around Minneapolis-based First Bank System as its CEO in 1990. He quickly became known as a cost cutter at the then-$10 billion-asset bank, slashing 20% of the workforce, turning over upper management and even taking potted plants out of the building.
Jack Grundhofer retired from banking 2002 and became chairman emeritus of U.S. Bancorp.
Grundhofer was kidnapped at gunpoint during his first year at First Bank System on the parking ramp as he was heading into work. Sticks of dynamite were strapped to his arms as he was forced to drive out to a wooded area in Wisconsin. After being left alone, Grundhofer managed to untie himself and escape to a nearby farmhouse. Investigators later suspected a former employee or a disgruntled borrower cut off from the bank’s tighter lending policies were behind the kidnapping, though it was never solved.
Despite the harrowing episode that became legend in the banking industry, First Bank started to right the ship. It went on to make nearly three dozen acquisitions over the next several years, culminating in its 1997 deal for U.S. Bancorp in Portland, Ore.
The $9 billion merger created a $70 billion-asset company that took on the U.S. Bancorp name but remained headquartered in Minneapolis.
Richard Davis, who later became CEO of U.S. Bancorp and its subsidiary U.S. Bank and guided it through the 2008 financial crisis, said Grundhofer “took [First Bank] from near death” and set it up for its nationwide expansion.
In 2000, Grundhofer sold U.S. Bancorp to Milwaukee-based Firststar, which was run by his younger brother Jerry Grundhofer at the time, in a $21 billion deal. That deal created a $160 billion-asset company, which kept the U.S. Bancorp name and its Minnepaolis headquarters. Jerry was named CEO of the combined company and Jack became its chairman.
Today, U.S. Bancorp is the nation’s fifth-largest commercial bank, with $553.9 billion of assets. Its current Chairman and CEO Andy Cecere was mentored by Grundhofer and served as his chief financial officer before U.S. Bancorp was sold to Firststar and through the merger.
“[Grundhofer] pushed for excellence in financial management and had a vision that was bigger than what many thought was possible at the time,” Cecere said in a statement announcing his former mentor’s death.
Grundhofer retired in 2002 and became chairman emeritus of U.S. Bancorp. He spent time funding nonprofits and teaching. A longtime supporter of the arts, Grundhofer helped rescue the Palm Springs International Film Festival from financial trouble.
He is survived by his wife Patti, two daughters, five grandchildren and his brother Jerry.
