How Gen Z and millennials differ financially?
Financial vigilance: Millennials are more likely than Gen Z to say they regularly check credit card and bank statements for suspicious transactions (78% vs. 71%). Weathering a financial storm: Millennials tend to be more confident they can handle a personal financial crisis (54% agree compared to 48% of Gen Z).
In many ways, Gen Zers are better off than their parents were 30 years ago, but fewer are financially independent — here's why. Compared with their parents at this age, today's young adults are more likely to have a college degree and work full time, according to a recent report by the Pew Research Center.
Almost seven-in-10 respondents say inflation is outpacing their salary or wage growth. But inflation doesn't explain everything. Financial advisors says it makes sense that older millennials are the most financially anxious, as they have come up against some famously challenging economic circ*mstances.
Aligning on money is all the more pressing for younger generations, who are earlier on in their relationships and careers—nearly half (49%) of Gen Zers view financial compatibility as more important than physical compatibility. That's compared to 40% of millennials, 35% of Gen Xers, and 30% of baby boomers.
Millennials were born between 1981 and 1996 while members of the Gen Z years Gen Z years were born between 1997 and 2012. Millennials expect faster customer service. Gen Z tends to be better at accepting delayed gratification than millennials. Millennial customer service expectations are higher than Gen Z customers.
With that said, Gen Z is a credit-friendly generation--they're just careful about falling into debt traps. Sixty-five percent of Gen Z is credit active and half have a credit score of 661 or above. (Only 39% of Millennials had the same score or higher!)
Within Gen Z, financial literacy tends to be lowest among those who have never attended college. On average, this group correctly answered only 39% of the index questions. Across generations, financial literacy tends to be greatest in the areas of borrowing and saving.
For example, a new study by the Investment Company Institute (ICI) finds that “Gen Z households have nearly three times more assets in the [retirement] plan accounts (adjusted for inflation) that Gen X households did at the same age.” More Gen Z-ers have retirement plans set up and they've saved more in those accounts.
According to recent data from a 2023 Pew Research Centre survey, Gen Z is more financially independent at a younger age than prior generations. While still in school, a sizeable proportion of Gen Zers work part-time, freelance, or have side hustles.
SILENT GENERATION (1954 and Earlier)
Because they largely grew up with little money and needed to stretch their dollar when they could, the Silent Generation is quite frugal and emphasizes the importance of saving.
Do Gen Z think they will be rich?
A staggering 75% of Gen Z high-net-worth individuals expect to see their wealth increase in 2024. Of that group, 43% even expect to see "significant growth." What's more, Gen Zers aren't just feeling confident about their financial game in 2024—they stand out as the most self-assured generation of all.
As one of the most philanthropic generations, Baby Boomers have had a considerable impact on the charitable sector. Having lived through significant historical events, many Boomers feel a sense of responsibility to give back to society.
Millennials think Gen Z doesn't know how to have fun — but it's more complicated than that. People are confused about what Gen Z does for fun. Some are worried they don't have fun at all. Gen Zers say they spend a lot of time in the house reading, playing games, and crocheting.
Many of the theories online veer into the conspiratorial: One woman suggested that Gen Z looks older because the quality of food is getting worse, which results in faster wrinkles; another claimed that it's because food is getting better, and because millennials ate food with more preservatives in it than Gen Z, ...
Eventually, Gen Z will overtake Gen X too — but it'll be “a long time before they overtake millennials,” says Terrazas, because millennials outnumber all other generations in the United States so far. “It probably won't be until the early 2040s.”
Amongst Gen Z, 40% of respondents express a lack of confidence in their current financial situation. This generation faces challenges amid economic uncertainties. Influenced by events like the 2008 financial crisis and the lingering effects of the pandemic, there is an increased sense of vulnerability among Gen Z.
Gen Z has experienced higher poverty rates than millennials, Gen Xers and baby boomers, according to the KIDS COUNT Data Center, but Gen Alpha is the poorest generation to date.
It's about how they manage it. Gen Zers have shown they are thinking ahead when it comes to managing money. They are budgeting, saving, and planning for their financial futures. These habits, combined with increasing income over time, lay a strong foundation for growing wealth.
In fact, according to ResumeLab, 83% of Gen Z employees consider themselves to be job hoppers, and 75% would leave a job even if they didn't have another one waiting.
Americans — particularly Millennials and those with lower incomes — are becoming increasingly overextended financially: Credit card and auto loan delinquencies have not only surpassed pre-pandemic levels, they're the highest they've been in more than a decade.
Are millennials the richest generation?
By Knight Frank's estimation, this shift will make affluent millennials “the richest generation in history.” Previous reports show this figure at a lower $84 trillion, but nonetheless confirm a shake-up in the foundations of spending power across the globe.
Gen-Z Faces Financial Challenges, Stress, Anxiety And An Uncertain Future. Senior Contributor. I write actionable interview, career and salary advice. Gen-Z feels substantial anxiety and stress about jobs, long-term financial stability and major life steps, such as buying a home and starting a family.
The transition into a fully remote world has negatively impacted Gen Z and hindered the development of essential soft skills needed in a traditional work environment. Soft skills are defined as people skills.
King said millennials' purchasing preferences and the soaring cost of living has led many into "a vicious cycle of taking on more debt." Many were "forced" to rely on credit cards and loans to meet their needs, adding to their "crippling debt pile."
A prime culprit: higher expenses that have limited their ability to put money aside for savings and investments. Only 11% have enough savings to cover the cost of living for more than a year if they had no income, while 48% cannot cover more than two months' worth of expenses, according to the report.
