Gen-Z vs Millennial: Approach to Personal Finance
Personal finance is important for people of all age groups. However, there are stark differences in the ways two influential generations - the Generation Z (Gen Z) and the Millennials - manage their money.
Financial Habits of Gen-Z
The generation born between 1997 and 2012 is referred to as Gen-Z and they are the first generation to get introduced to the digital world. They are incredibly tech-savvy and comfortable managing their finances online.
As they frequently use fintech apps to monitor their daily expenses and savings goals, Gen-Z tends to start saving early, yet only half of them feel confident in their financial knowledge which highlights a gap between awareness and expertise.
Financial Habits of Millennials
Millennials are those born between 1981 and 1996. Even though they experienced the rise of digital banking at an early age, the Millennials tend to balance digital tools with more traditional financial approaches. They focus on stability, debt management, and long-term financial security.
The Millennials are inclined to use traditional financial tools and they meticulously track their spending and are more cautious when making financial decisions.
Investment Preferences of Gen-Z
This generation is open to high-risk, high-reward investment opportunities and are drawn to unconventional investment options such as cryptocurrencies, NFTs, and startups. This entrepreneurial mindset is also reflected in their preference for side hustles and small business ventures.
Investment Preferences of Millennials
As many Millennials witnessed financial instability during their formative years, they prefer low-risk and more traditional and strategic investments, like SIPs in mutual funds, Equity-Linked Savings Schemes for tax savings, and real estate as a long-term asset. They also focus on diversifying their portfolios to manage risk.
Financial Education and Knowledge Building
While Gen Z has a desire to learn about personal finance, they usually use online sources for education but face challenges in understanding advanced financial concepts.
The Millennials, however, rely on a mix of traditional resources and digital content for financial education. They often seek professional advice for long-term planning, such as retirement and wealth building.
Long-Term Financial Goals
Unlike Millennials, Gen Z prioritises financial flexibility and are less focused on traditional goals like homeownership or long-term retirement savings. Their financial planning is often short-term, focusing on building liquid assets that allow them to adapt quickly to changing circumstances.
The Millennials, however, prefer financial security and focus on building wealth through stable investments.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.