Gen Z’s money habits might surprise you with their savvy approach to finances.
When it comes to managing money, each generation has its own unique style. Gen X, born between the mid-1960s and early 1980s, came of age in a world of traditional financial advice—think budgets on spreadsheets, saving for retirement in 401(k)s, and cautious investing. On the other hand, Gen Z, born in the late 1990s through the 2010s, has grown up in the age of apps, side hustles, and financial influencers on social media. But who’s really better with money?
Surprisingly, despite their youth, many Gen Zers are already displaying a level of financial awareness that might catch older generations off guard. While they face unique challenges like student debt and a volatile job market, they’re also leveraging technology, staying mindful of debt, and prioritizing financial wellness.
The truth is, Gen Z might just have a few money lessons to teach Gen X—and anyone else who’s paying attention.
1. Gen Z is more likely to save aggressively and start early.
One of the biggest financial wins for Gen Z is their focus on saving early. Many young adults are already putting money away for emergencies, short-term goals, and even retirement. Unlike previous generations who often waited until their 30s or 40s to get serious about savings, Gen Z is taking advantage of apps and digital tools to automate savings and track their finances.
This proactive approach might stem from seeing older generations struggle with debt or lack of savings. The financial instability they’ve witnessed—from the Great Recession to the economic impact of the pandemic—has influenced Gen Z to prioritize financial security, as stated by Alice Collins of Newsweek. Their willingness to start saving young could give them a major advantage in building long-term wealth.
2. Gen X holds the edge in long-term investing and stability.
While Gen Z is great at saving, Gen X tends to shine when it comes to long-term investing. With more time in the workforce and greater access to traditional retirement plans like 401(k)s and IRAs, Gen X has had the opportunity to build investment portfolios and benefit from compound growth. They also tend to favor more stable investments, showing patience that often comes with experience, according to Jody Shaw of Kadence.
This generation learned money lessons through market ups and downs, and many have become seasoned investors as a result. Their more conservative approach might not be as flashy as Gen Z’s interest in cryptocurrency or meme stocks, but it often translates to a solid, steady growth of wealth over time.
3. Gen Z is quick to adopt new financial technologies.
Growing up in the digital age has made Gen Z incredibly comfortable with financial technology. They use budgeting apps, investment platforms, and digital wallets with ease. Many of them are drawn to new financial opportunities like cryptocurrencies, NFTs, and innovative investing platforms that allow for fractional shares and automated strategies, as reported by HTEC.
This tech-savviness allows Gen Z to access financial tools and information that previous generations couldn’t dream of at their age. It also means they can avoid some of the pitfalls of traditional banking, such as high fees or slow service. However, the fast pace of the digital financial world also comes with risks, and Gen Z’s challenge will be balancing innovation with smart, long-term financial decisions.
4. Gen X is more cautious about debt and credit.
While Gen Z is often praised for avoiding credit card debt, Gen X has a more cautious and strategic approach to managing credit. Many Gen Xers lived through the 2008 financial crisis, learning firsthand the dangers of high debt and poor credit management. As a result, they tend to focus on maintaining strong credit scores, managing mortgage debt carefully, and avoiding high-interest loans.
This generation often emphasizes paying down debt as a path to financial freedom, focusing on stability over risk. Their approach to debt can serve as a valuable lesson for younger generations who might be tempted by buy-now-pay-later schemes or quick financial fixes. Gen X’s experience with economic downturns has taught them the importance of having a financial cushion and staying prepared for the unexpected.
5. Gen Z is redefining what financial success looks like.
For Gen Z, financial success isn’t just about having a big house or a fancy car. Many young adults are more interested in financial freedom, experiences, and mental well-being than in material wealth. They prioritize work-life balance, value-driven spending, and investing in things that bring genuine happiness rather than status.
This mindset shift means Gen Z might be less likely to accumulate debt for the sake of appearances. They are often drawn to minimalism and mindful spending, choosing quality over quantity. This focus on living within their means and aligning finances with personal values could lead to a healthier financial future.
6. Gen X uses traditional budgeting methods that still work.
While Gen Z embraces technology, Gen X often sticks to traditional budgeting methods—and it works. Many in this generation still use spreadsheets, physical budgets, or the envelope system to manage their money. This hands-on approach provides a clear picture of their finances and helps avoid overspending.
Traditional budgeting methods may seem old-fashioned, but they can offer stability and control. For Gen X, budgeting isn’t just about tracking expenses—it’s about setting goals, planning for the future, and maintaining a sense of security. These skills are crucial during economic uncertainty, proving that sometimes, old-school methods are still the best.
7. Gen Z faces unique financial challenges but stays adaptable.
The economic landscape Gen Z faces is nothing like what Gen X encountered. With soaring student debt, rising housing costs, and a highly competitive job market, young adults are under significant financial pressure. However, Gen Z’s adaptability is one of their greatest strengths. They’re quick to pivot careers, explore new income streams, and find creative ways to make money.
Their comfort with side hustles, freelancing, and gig work helps them stay afloat even when traditional job opportunities are limited. This flexibility not only provides financial stability but also opens doors to entrepreneurial ventures and unconventional career paths that might not have been an option for Gen X.
8. Gen X demonstrates the benefits of long-term financial planning.
When it comes to building wealth over decades, Gen X often has the upper hand. Many have had time to invest in real estate, build retirement funds, and establish financial safety nets. Their experience with financial planning tools, such as life insurance and estate planning, highlights the value of thinking ahead.
This generation’s long-term perspective can serve as a model for younger adults. While Gen Z is great at quick wins and adapting to change, Gen X’s focus on stability and foresight can help create lasting financial security. The balance of both generations’ strengths could lead to the ultimate financial strategy—combining adaptability with preparation.
9. Gen Z is not afraid to challenge traditional financial norms.
One of the most exciting aspects of Gen Z’s approach to money is their willingness to question everything. They aren’t bound by traditional financial rules and are often open to exploring new ways to earn, save, and invest. This generation is more likely to invest in sustainable brands, support the gig economy, and prioritize experiences over material possessions.
This forward-thinking mindset can lead to innovative financial solutions and help push the broader culture toward more conscious spending and investing habits. However, as with any bold approach, there’s a fine line between innovation and risk. Gen Z will need to continue balancing their adventurous spirit with sound financial principles to ensure their money strategies stand the test of time.