Millennials vs. Gen Z: How the two generations manage their money

One generation still holds on to their skinny jeans, while the other only thrifts for vintage clothing. One grew up without the internet, the other doesn’t know what a flip phone is. The differences between Millennials and Gen Z’s stretch far beyond fashion trends and gadgets – they also think about money differently.

Here’s the low down: 

Millennials: Came of age during economic turbulence and opt for long-term financial security

Passive income streams and side-hustles are a norm for the generation born between 1981 and 1996. They generally have cautious spending habits and a strong inclination toward saving and investing, probably because their behaviour is significantly influenced by the Global Recession of 2008. Budgeting apps, investments and retirement savings through vehicles like retirement annuities and tax-free savings accounts tend to be prioritised to create a feeling of financial stability. The goal is to have a home and possibly some investments properties. 

Gen Z: Digital natives with a focus on instant gratification and impulsive spending

In contrast, Gen Zs, born between 1997 and 2012, have grown up in a digital-first world, making them more comfortable using fintech apps for banking, investing, and even cryptocurrencies. Convenience and instant access to goods and services are key. They usually look to social media influencers for financial education, and they value financial flexibility, saving only to go traveling, upgrade to the latest tech and further education, rather than long-term investments. 

Sustainability and ethical investing is a top priority, which millennials could learn from.  

Six tips from Consult by Momentum for Gen Z for better money management: 

1. Balance immediate and long-term goals: Enjoy the present while planning for the future. Allocate a portion of income to long-term savings and investments.
2. Stay informed: Learn about financial products, market trends, and money management strategies. Use online resources and seek advice from certified financial advisors.
3. Build an emergency fund: Create a financial safety net to cover unexpected expenses and avoid high-interest debt – you should aim to have a few months’ expenses saved.
4. Avoid impulsive spending: Be mindful of spending habits, especially with buy-now-pay-later services. Prioritise needs over wants.
5. Invest wisely: Diversify your investments to mitigate risks. This means considering a mix of innovative and traditional investments.
6. Find a trusted financial planner: A certified financial planner can help you achieve your short, medium, and long-term needs.

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