Gen Z vs Millennial Savings India: Money talks, but it speaks a different language to each generation. For instance, the way people spend changes, the way people save changes and more importantly, the way people invest changes. In earlier times, big landlords even donated lands, however, now the situation has changed. Forget about the land, Millennials today are not ready to even give away a piece of their clothes.
Under such circumstances when we talk about India, where economic growth and digital transformation are happening at breakneck speed, it is important to understand the difference in investing trends of India Gen Z vs Millennials? The battle lines are drawn, so let’s dive in and see who’s coming out on top in this Great Indian Savings Challenge!
Table of Contents
Gen Z: The Digital Natives of Gen Z vs Millennial Savings India
Born into the age of the World Wide Web, Gen Z is tech-savvy and financially curious. They’re:
A significant majority (77%) of Gen Z consumers in India aspire to own their own homes. Additionally, 59% dream of purchasing a car, and 55% hope to travel abroad. The study also reveals that over one-third of Gen Z individuals save money from their allowances and rely on parental financial support for their spending habits.
According to a study by Mintel
The Tech-Savvy Generation
Gen Z, born with smartphones in hand, is a generation that naturally loves technology. This love for tech shows up in their financial habits too. They are digital natives. This means they have not only grown up using technology, but also are very comfortable with it. They use online investing platforms like Zerodha, Groww, and Paytm Money just as easily as they use social media. These platforms let them explore multiple investment options, including stocks, mutual funds, and even the more unpredictable world of cryptocurrencies. Gen Z’s ease with technology makes it simple for them to manage their finances online.
| Fun Fact- As digital natives, 64% of Gen Z in India trust information they find on social media or the internet, seeing it as genuine. Additionally, 63% prefer shopping online over going to physical stores. They’re also excited about the future, with 69% believing that cutting-edge technologies like virtual reality and the metaverse will shape the future of social media. This generation is deeply connected to the digital world, influencing how they interact with information and shopping trends. |
Side Hustle Enthusiasts
Gen Z doesn’t just rely on traditional 9-to-5 jobs. They understand the importance of having multiple sources of income and are eager to take advantage of the gig economy. This means they are finding ways to make money outside of regular jobs.
They might freelance on websites like Upwork or Fiverr, where they can offer their skills and services. Many are also creating engaging content on YouTube or Instagram, gaining followers, and earning money through ads and sponsorships. Some even start their own online stores, selling products they create or curate. This generation is all about hustling to increase their savings and achieve financial independence.
Experiences Over Things
Although Gen Z may occasionally indulge in luxury purchases, their priorities when it comes to money are distinct from those of earlier generations. It’s evident that Gen Z in India would rather spend money on experiences than material goods when compared to Millennials. They would prefer to set aside money for excursions, learning opportunities, or special events like festivals and concerts. They prioritize experiences over possessions, demonstrating a willingness to make enduring memories and make an investment in their own growth and development. They think that investing in experiences rather than material goods makes life more fulfilling.
The financial habits of Generation Z are indicative of their tech-savvy mindset, entrepreneurial energy, and desire for life-affirming activities. They are navigating their financial journey in a way that aligns with their values and the digital age they live in.
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Millennials: The Ambitious Strivers of Gen Z vs Millennial Savings India
Millennials came of age during India’s economic boom. They’re characterized by:
The EMI Generation
Many millennials find themselves in a financial balancing act, often referred to as the “EMI Generation.” This term reflects their propensity to take on multiple loans simultaneously, such as home loans, car loans, and personal loans. While these financial commitments enable them to achieve significant milestones like homeownership and vehicle ownership, they also put a strain on their savings potential. EMIs, or Equated Monthly Installments, can consume a significant portion of their income, leaving less room for other financial goals.
“In the past year, big e-commerce names like Amazon, Myntra, Flipkart, MakeMyTrip, Decathlon, and Paytm have experienced a significant boost in online sales thanks to EMI financing schemes. As a result, the use of EMIs soared by over 84% in tier 1 cities, 140% in tier 2 towns, and 145% in tier 3 areas in 2019. This growing trend means people are using less cash, which is helping create a dynamic financial environment and driving business growth for many modern companies.“
The Times of India
Traditional Yet Adapting
Despite the EMI burden, millennials are not shying away from investing. Their investment approach is often characterized by a blend of traditional and modern methods. While they may still harbor a fondness for traditional investment vehicles like fixed deposits (FDs) and gold – often influenced by family traditions and cultural factors – they are increasingly exploring newer options like Systematic Investment Plans (SIPs) in mutual funds and digital gold. This reflects their willingness to adapt and embrace technology-driven solutions for wealth creation.
Balancing Act
Moreover, millennials are constantly striving to find a delicate balance between saving for the future and enjoying the present. They are acutely aware of the importance of long-term financial security, with goals like retirement planning and funding their children’s education. However, they also value experiences and are not willing to sacrifice their current lifestyle entirely for the sake of future savings. This balancing act necessitates careful financial planning and prioritizing, often with the help of financial advisors and online tools.
Millennials demonstrate a stronger commitment to saving, with 30% higher regular saving habits compared to their parents' generation. Furthermore, they are significantly more likely to budget, with over 80% creating and sticking to a budget, compared to only two-thirds of older generations.Key Differences & Similarities
| Feature | Gen Z | Millennials |
| Risk Appetite | Higher (comfortable with volatility) | Moderate (preferring safer options) |
| Investment Tools | Primarily digital apps | Mix of traditional and digital |
| Financial Goals | Experiences, self-improvement | Homeownership, financial security |
| Financial Literacy | Growing rapidly thanks to online resources | Varies, often seeking expert advice |
| Debt Burden | Lower | Higher (due to loans and EMIs) |
Who’s Winning the Savings Game – Gen Z vs Millennial Savings India
While both generations in Gen Z vs Millennial Savings India debate exhibit distinct approaches to saving, it’s difficult to declare a clear winner in the savings game. Gen Z has taken an early lead not only by embracing digital investing platforms, but also by exploring diversified income streams through side hustles and freelancing. Their tech-savviness and willingness to try new things have opened up a wealth of opportunities.
Millennials, on the other hand, often have a slight edge in terms of income and experience, having spent more time in the workforce. They’ve had more opportunities to climb the career ladder, and their financial decisions often reflect a cautious optimism, balancing the desire to enjoy life with the need to plan for the future.
| Millennials and Gen Z are both avid digital shoppers, favoring brands with a strong online and social media presence, and make up a significant portion of online purchases. They tend to be wary of credit cards, preferring “buy now, pay later” options instead. A notable percentage of both generations engage in side hustles to supplement their income. While neither generation is particularly fond of budgeting, they do recognize the importance of saving. |
However, the real key to financial success lies in blending the strengths of both generations. By combining Gen Z’s enthusiasm for digital tools and diverse investments with Millennials’ long-term focus and appreciation for traditional financial products, individuals can create a truly winning strategy.
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Investing trends India Gen Z vs Millennials
Learn From Gen Z
- Embrace the Digital Landscape: Gen Z has grown up with technology, and they’re not afraid to use it to their advantage when it comes to finances. Hence, we recommend you take inspiration from them and explore the various digital investing platforms available in India. Apps like Zerodha, Groww, and Paytm Money offer user-friendly interfaces and access to multiple investment options, making it easier than ever to start your investment journey.
- Leverage Technology for Financial Management: Secondly, we recommend you utilize budgeting apps, expense trackers, and online tools to monitor your spending, set financial goals, and automate savings. This will not only help you gain better control over your finances but also help you make informed decisions.
- Explore Diverse Income Streams: Gen Z understands that relying on a single source of income may not be enough to achieve their financial goals. This is why they consider exploring freelance opportunities, starting an online or e-commerce business, or monetizing hobbies and skills. These additional income streams can significantly boost your savings potential and offer greater financial flexibility.
Take a Cue From Millennials
- Plan for the Long Term: While it’s important to enjoy the present, don’t neglect your long-term financial goals. Millennials have learned the importance of planning for milestones like retirement, buying a house, or funding their children’s education. Hence, start early, even if it’s with small contributions, and let the power of compounding work its magic.
- Don’t Dismiss Traditional Financial Products: While digital investments are gaining popularity, traditional options like fixed deposits and gold still hold value. Fixed deposits offer stability and guaranteed returns, while gold acts as a hedge against inflation. So, consider incorporating these into your portfolio for diversification and risk management.
- Seek Expert Advice: Last but not the least, if you’re unsure about where to start or how to allocate your investments, don’t hesitate to seek professional guidance. Financial supervision can help you create a personalized plan based on your tolerance for risks and financial objectives.
All in all, by adopting a hybrid approach, you can leverage the strengths of both generations- Gen Z vs Millennial Savings India, to maximize your savings and achieve your financial goals. Remember, it’s not about choosing one generation over the other, but rather about finding a strategy that works best for your individual circumstances and aspirations.
Conclusion: The Future of Indian Savings
The future of saving money in India looks really promising. Both Gen Z and Millennials are keen on securing their financial futures, which means we’ll likely see more new and exciting financial products and services coming up. No matter if you’re a Gen Z hustling to make extra cash or a Millennial working hard to build your savings, remember that it’s never too early or too late to start saving and investing. Use the resources available to you, keep yourself updated with financial news, and make choices that fit your personal goals. The Great Indian Savings Challenge is here, and you have the chance to come out on top!
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FAQs: Gen Z vs Millennial Savings India
Q. What is the percentage of Millennials and Gen Z in India?
As of 2021, Gen Z and Millennials made up 52% of India’s population, which is higher than the global average of 47%. This highlights their significant impact on India’s economy and financial landscape.
Q. Does Gen Z save more money?
The answer is complex. Gen Z is known for being smart with money and using digital investment tools. However, they also enjoy spending on experiences and often have lower incomes than Millennials. Millennials might earn more but usually have more financial responsibilities like loans. Ultimately, saving habits depend on individual circumstances and priorities.
Q. How do Gen Z and Millennials differ financially?
Gen Z leans towards digital tools, using investment apps and exploring cryptocurrencies. They also tend to have side jobs for extra income. While Millennials also use digital tools, they often prefer traditional investments like fixed deposits and gold. Millennials may focus more on buying homes and achieving financial security, whereas Gen Z values experiences and self-improvement more.
Q. Do Gen Z have no savings?
This is a misconception. While Gen Z may prioritize experiences and have lower incomes, many of them actively save. They save from allowances or part-time jobs, often with specific goals like travel or further education in mind.
Q. Is Gen Z financially literate?
Gen Z shows promising signs of financial literacy. They actively seek information online, use educational resources, and engage with financial experts on social media. However, there’s always room for improvement, and financial education programs can help this generation make better financial choices.
Q. Which generation is the most financially stable?
Financial stability varies widely within each generation due to factors like income, debt, and spending habits. It’s not accurate to say one generation is always more stable than another. Research suggests that Millennials, who have more established careers and possibly higher incomes, might be more financially stable overall. However, Gen Z’s comfort with technology and early use of financial tools could help them achieve financial success in the future.
