Silver errors can start early, and General Zers may make major mistakes, according to Katrin Kaurov, CEO and co-founder of the Social Financial Platform Frich.
She says that modeling aged 14 to 24 taught her to manage her money in a way that many age do not have to do so.
“I would spend three months in Milan, three months in London and three months in Hong Kong,” Kaurov told Business Insider. “So I had to become financially independent and be an adult at the age of 14, 15, 16, when everyone went to parties.”
When she moved to New York in her twenties, Kaurov realized that it was not the norm. She saw her friends wading with regard to their finances. They did not know how to manage their money, but seemed to live sumptuous lives on social networks.
Kaurov and her friend Aleksandra Medina founded Frich in response to what they saw, aimed at helping young people learn “radical transparency and honesty” around money.
“The money should not be lonely and sad and inducing anxiety,” said Kaurov. “We know that the money is at the origin of each decision you take in life, and that does not need to be frightening.”
Here are some of the biggest mistakes that Kaurov thinks that the Gen Zers is doing and what they can do to repair them.
1. believe everything on social networks
Social media, especially Tiktok, are full of financial advice. Everything is not good.
Kaurov said that if Tiktoks and Instagram Reels are perfect for opening the conversation on money, a lot is “not really checked”.
“You see a 17-year-old tiktok who is like, this is how I built a seven-digit company overnight, I am 17 years old and I am already retired. I think that creates very unrealistic representations of the way people manage money,” she said. “It creates an idea that generation Z has money, when in reality, most people do not do it.”
Young people should not compare themselves to these messages, said Kaurov, and think about their own objectives and aspirations.
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2. Do not become real on credit card debt
General Zers accumulates a lot of credit card debt. They must become real on this subject if they want to face all their challenges, said Kaurov, as saving enough for a house on a house.
Social media, once again, play a role here. “Especially in cities like New York or London, it seems that everyone has dinners every night and they make these incredible trips,” she said. “It just makes you ask you, wait, why am I always broken? Do I do something wrong?”
You never see if your peers are in debt “, which does most,” said Kaurov.
“You never really see the truth. Maybe their card is refused in the restaurant.”
3. Make budgets too restrictive
Kaurov said people can create budgets with too much enthusiasm and optimism for the little money they will spend from one month to another.
She said that a budget should consist in creating a realistic directive for expenses and savings – and if it is too restrictive, rethink it. “The tests and errors are crucial and will allow people to find the best budget type for them.”
4. Do not reserve enough time
Kaurov recommends young people to put aside about 30 minutes per week for a “date of money”.
“In the same way that we review our fitness objectives and our career goals,” she said. “Review what you do with money, what are your goals, where are you going?
“Have a money date when you review what you spend and go step by step.”
5. Reliance on BNPL applications
Purchasing-night-pay-in-art (BNPL) As Klarna and Affirm facilitated the expenditure easier than ever.
Kaurov warned that counting on them can be catastrophic. “Recently, I went to a bar and I saw that you could pay for your drink with Afterpay,” she said. “I mainly took a micro-loan to have a drink.”
This is a sign that things went too far, said Kaurov. “This is something that I would really highlight so that people pay attention.”
6. Wait too long to start investing
Regarding the investment, “you just have to start,” said Kaurov.
She waited for years to start investing, but said it shouldn’t be intimidating.
Kaurov said that she had started micro -investment – the implementation of automatic investments every week – and that only took five minutes.
“Things are not as hard and frightening as they resemble it,” she said.
Kaurov added that being in their twenties really works in your favor, because even small contributions, like $ 50 per month, add up over time.
“I always like to compare this to run a marathon. You will never do it the first day.”
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