NEW YORK--(BUSINESS WIRE)--Lili, the all in one banking app built for freelancers and small business owners with over 500,000 users, has released its Future of Work Report. The report compiles data from over 1,000 Gen Z Americans, ages 18-24, on a range of topics including financial literacy, taxes, savings habits, business expenses, and more. To best serve the business community, Lili wants to best understand how young entrepreneurs feel about the most complex and frustrating financial responsibilities. Younger generations are more eager to run their own business than ever before – indicative of the new era of the future of work and calling for financial technology that will address their needs in a format that speaks to this generation. While 50% of Gen Z worked as freelancers in 2021, Lili’s report found that nearly 1 in 3 of the young Gen Z freelancers surveyed kept track of their expenses and receipts using their smartphone notes app.
“It’s truly amazing to see how many young entrepreneurial people are eager to take their careers into their own hands,” said Lilac Bar David, CEO of Lili. “Finances were one of the biggest reasons people were scared to jump into freelancing, especially leaving jobs with benefits to work on their own full-time. Now people, and especially younger generations early in their careers or about to enter the workforce, are realizing the immense benefits of being your own boss, controlling your own hours, and determining your own wages.”
As Gen Z continues entering the workforce, they will comprise the majority of the next wave of freelancers, whose population is projected to reach 90.1 million by 2028. Lili’s research showed that tax season constantly proved to be a challenge even for the most established freelancers. As the last tax filing day nears, many are scrambling to gather every document, bank statement, business expense report, and calculate their returns or how much they have to pay back to the IRS. It becomes especially frustrating when they have to repeat this process throughout the year, as they are required to file taxes on a quarterly basis – usually up to five times a year. When it comes to the younger generations, most of them are navigating the new world of freelancing without a clear understanding of the impact this type of work has on their tax liability. In fact, Over 90% of Gen Z respondents were unaware that freelancers and self-employed workers should be paying taxes on a quarterly basis.
This lack of information can be linked to the general public’s unease around financial management overall. In fact, 90% of Gen Z also reported feeling anxiety when hearing the word taxes. "They really should be teaching this in high school! While it is inspiring to see an entire generation rekindle the American entrepreneurial spirit, from content creators to the Great Resignators, it is also quite discouraging to see that they're not supported by the traditional systems, both educational and financial,” says Matthieu Silbersetin, VP of Marketing. "We see it as our mission here at Lili to reassure, educate and support our users to navigate the financial pitfalls that come with the freelance lifestyle, increase their bottom line and save time and energy to focus on their career.”
A common misconception with Gen Z is that they are overly reliant on social media channels for critical information, including financial advice. However, Lili’s report found that of the Gen Z respondents who either currently freelance or have freelanced before, approximately 84% would prefer to turn to a person in their life (a parent, friend, significant other or a financial advisor) over social media creators for financial advice on taxes.
“Social media and technology are allowing more people at younger ages to have access to high-income potential jobs,” said Matthieu Silberstein, VP of Marketing. “While it’s incredibly inspiring to see how many young people want to take their careers into their own hands, it’s alarming how many misconceptions there are about being a freelancer. We see it as our responsibility to educate and inform our customers about the financial pitfalls that have plagued too many freelancers for too long, given how often they're unprepared for tax season, and as a result, end up paying more than they should.”
Other key trends revealed by the study:
- 90% of Gen-Zers reported feeling anxious when they heard the word taxes.
- Nearly 60% of women did not know freelancers/self-employed workers should be paying taxes quarterly compared to 40% of men that did not know this information.
- 51% of current students (full-time or part-time), who are freelancing or have freelanced in their careers, did not know that freelancers can deduct business expenses at all.
- 1 in 3 people surveyed keep track of their expenses and receipts mainly using their smartphone notes app.
- Nearly 30% of respondents had never had anyone help them understand how taxes were calculated.
- 83% of Gen Z believe they would be able to save more money if they understood how taxes were calculated.
- In a list of celebrity couples, the majority of respondents would take financial advice first from J-Lo and Ben Affleck, followed by Pete Davidson and Kim Kardashian.
Read the full Future of Work Report here: https://lili.co/blog/future-of-work-report
Lili was named one of the top 50 Most Innovative Companies in the World 2022 by Fast Company. By combining a checking account with technology to save on taxes and accounting software, Lili is an all-in-one mobile banking app designed to save time and money for anyone who runs a business on their own. Led by serial entrepreneurs with 20 years of fintech experience, CEO Lilac Bar David and CTO Liran Zelkha, Lili is backed by Group 11, Foundation Capital, AltaIR Capital, Primary Venture Partners, Torch Capital, Target Global and Zeev Ventures. Founded in 2019, Lili is headquartered in New York and serves customers in all 50 states. Banking services are provided by Choice Financial Group Inc., a Member FDIC. To learn more, visit lili.co.