How does Gen Z approach money?
All over the world, the way in which each generation spends on products and services, or saves is evolving. Gen Z youths, or those born between 1997 and 2012, stand out above all others. As compared to previous generations, theirs is the first generation who has grown up with technology using smartphones, computers, and the internet.
Gen Z has been evaluating their financial practices, particularly since the pandemic struck. As the majority of them started their career during uncertain times, they are more inclined toward saving.
Let us see some saving habits of Gen Z
- Investment in stocks
Since the outbreak of the pandemic, the percentage of young investors has increased. 17 million new investors entered the National Stock Exchange (NSE) in the last two years. Five million new investors have joined the NSE since April 2021, making up 62.5% of the total additions this year. This shift has significantly influenced the nation’s financial markets and the overall economy.
- Investment in cryptocurrencies
These youths are risk-takers who believe that blockchain is the future. Hence they are investing in cryptocurrencies and are willing to take risks for better returns.
- Minimizing the expenses
As Gen Z has seen the financial crisis, they have understood the importance of saving. Hence, they are minimizing their expenses or opting for more cost effective alternatives.
- Hustle culture
This young generation with the intention to be financially independent as early as possible have been taking up small gigs or earning through freelancing. This is another way by which most of them have been able to earn more and also save more.
Apart from this, Gen Z has also played an important role in shifting from traditional all-cash transactions to technology-driven online transactions with the help of fintech and UPI-based methods.
Many surveys have been conducted in India as well as worldwide to understand more about the spending patterns, financial attitudes, and payment preferences of GenZ.
According to the survey by Viral Fission, a youth community platform, majority of Gen Z prefer saving rather than spending.
About 23% of respondents preferred the safety of fixed deposits and half of the above said they are willing to take risks and hence prefer cryptocurrencies over safer investment options.
About a quarter of the people surveyed said that they would spend their money on travel, whereas 13% of them said that they would spend their money on groceries, food, and shopping.
The least priority was spending on fitness and leisure. Most participants indicated that they would spend little to no money on these.
Thus, it is evident that when it comes to saving, Gen-Z is proving to be better as compared to millennials. The pandemic has been instrumental in instilling a sense of responsibility amongst Gen Z and they are making wiser financial decisions.
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