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Financial Inclusion for Gen Z- Quicker Is the New Better

In today’s changing world, financial planning for Gen Z is more critical than ever. Born between the late 1990s and early 2010s, Generation Z has grown up amidst rapid technological advancements, social shifts, and economic disruptions. As digital natives, they demand quick and efficient financial services that align with their lifestyles.Read More

Financial inclusion for Gen Z focuses on enabling access to essential financial tools such as savings accounts, insurance, and investment options that are affordable and user-friendly.Read Less

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Written ByShruti gujarathi
AboutShruti gujarathi
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Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th January 2025
Modified on: 9th January 2025
Reading Time: 15 Mins
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What Does Financial Inclusion Mean for Gen Z?

It is crucial for Gen Z to understand the financial matters. Most of the Indian households do not involve their children to financial matters. While it is alright to not involve your kids in critical financial situations, it important for them to understand everyday household expenses. By involving them in day-to-day money matters as a parent you lay a foundation towards your children becoming financially literate. [1]


Why Financial Planning Is Important for Gen Z

Look around you, startups and new businesses are emerging every day. So, in a world where technological change is the new normal, to get a headstart Indian entrepreneurs should be exposed to the world of finance early[1].

By 2025, Gen Z will constitute 30% of the global workforce and hence, will make a significant impact in functioning of businesses[2].


1. Diverse Investment Portfolio

Survey suggests that Gen Z has a diverse investment portfolio. While equity emerges as the most favored asset[3].


2. Inadequate Emergency Preparedness

Majority of Gen Z is not prepared for emergencies, with less than six months of emergency corpus invested in liquid assets. This highlights the need for better financial preparedness[3].


3. Less Investment Towards Insurance

As per the survey 72% do not have a health insurance and 78% do not have life insurance[3]. This shows how important it is for the tech savvy youngsters to be prepared for life's unfortunate circumstances.


4. High Risk Appetite

The generation is inclined towards undertaking loans that are high relative to their assets. The imbalance indicates how important it is for Gen Z to be financially stable[3].


5.Credit Usage

With a digital-first mindset, Gen Z readily adopts fintech tools. But the young generation needs to be mindful about their borrowing habits. 1 out of 5 youngsters have personal loans. Many have personal loans as well as credit card debts[3].


Steps in Financial Planning for Gen Z

While Gen Z is making Financial strides towards investment and savings, most of them still face significant challenges when it comes to insurance coverage, debt management and emergency planning[3].


1. Embrace Digital Solutions

Keeping up with the trend and financial stability can go hand in hand. Some apps that could help in budgeting would be YNAB (You Need A Budget) and PocketGuard. Once you sync your account the app shows the flow of your money[4].


2. Simplified Budgeting

Opt for the oldie but goodie 50/30/20 rule. 50% of your income goes towards your needs, 30% towards your wants and 20% towards savings. This can help in building stability[4].


3. Boost Your Income

Choose freelance jobs, content creation and e-commerce as a way to boost your income. Multiple sources of income keeps the money flowing[4]


Conclusion

Financial planning for Gen Z is integral to their journey towards financial independence and security. This generation, raised in a digital-first era, faces a unique financial landscape filled with opportunities and challenges. With rising student debt, fluctuating job markets, and an increasingly complex economic environment, understanding the fundamentals of budgeting, investing, and saving has become more crucial than ever. By providing tools that resonate with their tech-savvy nature, such as budgeting apps, automated investing platforms, and financial education tailored to their preferences, we can foster financial inclusion that meets them where they are. These tools not only simplify financial management but also help them build confidence in their decision-making abilities.


FAQs

1. What is financial inclusion, and why is it relevant for Gen Z?


Financial inclusion ensures that financial products and services are accessible and affordable for everyone. For Gen Z, it helps them manage their finances effectively using digital tools.


2. How can Gen Z start financial planning?


They can begin with simple steps such as budgeting, saving for emergencies, and exploring basic investment options[4].


3. What role does financial literacy play in financial planning?


Financial literacy provides the knowledge to make informed decisions, avoid scams, and build a secure future.


4. Are digital financial tools safe for Gen Z?


Most reputed platforms use encryption and multi-factor authentication to protect users. However, it’s important to verify the credibility of any platform before using it.


5. What role do institutions play in promoting financial inclusion


Institutions can enhance financial inclusion by simplifying products, educating users, and adopting technology to deliver services efficiently.

 

 

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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

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*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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