Generation Z’s Financial Habits

Generation Z’s Financial Habits

Gen Z: The Mysterious Financial Habits of New Adults


The designation of date ranges for each generation is a relatively arbitrary process, and therefore an end year for Gen Z is currently up for debate. However, it is generally agreed upon that people who are part of “Gen Z” were born during or after 1997. Estimates place the Gen Z population in the U.S. at about 67 million as of 2020, although estimates vary depending on what year various surveys use as a cutoff date.

As with all generations before them, Gen Z will experience a unique financial landscape formed by the combination of their generational circumstances and the state of the economy. Compared to millennials, for example, young adult members of Gen Z typically have more manageable debt and better credit scores than millennials did at a similar age. This is typically attributed to the current trend of economic expansion.

However, in addition to larger economic factors, the financial circumstances of Gen Z are heavily impacted by demographic and cultural factors that influence their financial habits.

Spending Habits

Ultimately, spending habits depend on the person. However, each generation typically demonstrates characteristic spending habits overall. As a young generation, Gen Z’s spending habits are still emerging. That being said, distinctive spending habits for Gen Z include a preference for digital payment options and a hesitancy to take on large debts.

Prioritization Spending

Prioritization spending refers to the practice of assessing your spending needs, categorizing them based on priority, and then using that information to build your budget. Gen Z’s inclination toward prioritization spending is tied to their hesitancy to take on large debts. They strongly value the ability to keep their expenses manageable and are reaching adulthood in an economy that allows them to do so realistically.

Spending Regrets

Spending regrets arise when you make a purchase and then regret it. Because people in Gen Z strongly value not biting off more than they can chew, they are prone to spending regrets. They are also highly likely to go to great lengths to avoid spending regrets.

Saving Habits


The emerging savings habits of Gen Z are unique, as they demonstrate both a relative lack of interest in saving and strong resistance to the idea of taking on significant debt.

Lack of Traditional Savings

At this point, it seems that traditional savings options with a bank are not a significant priority for many people who are part of Gen Z. However, they may also be more likely than young adults of previous generations to make sure that they understand their options pertaining to both traditional saving methods and innovative savings methods.

Furthermore, members of Gen Z may be increasingly interested in emergency funds following the financial upheaval caused by the COVID-19 pandemic. Overall, however, it will take time for more concrete savings trends to emerge in this young generation.

Debt Avoidance

As previously mentioned, Gen Z is hesitant to take on large debts compared to previous generations. This is due in part to the fact that an expanding economy means they have more options. They may choose a completely different route for pursuing large expenses, or they may take the opportunity to shop around to find the best loan possible.

Furthermore, as real-world experience increasingly outweighs formal education as an avenue for job advancement, Gen Z has less need to utilize student loans.

Preference for Ethical and Socially Aware Brands

Consumers are increasingly interested in ethical goods and services, and this trend is in no small way fueled by the preferences of Gen Z. This interest in ethical goods is also fueling an emphasis on brand transparency regarding things like working conditions, materials used, and the overall supply chain.

Gen Z is also helping to fuel an interest in frequenting small businesses instead of large businesses. This is largely due to easier access to information about business practices, more sustainable production and distribution methods, and support for local economies.

Expectations of Personalization

Personalization is yet another economic trend being fueled by the preferences of Gen Z. Instead of the mass production strategies of the past, Gen Z is increasingly interested in personalized products and services, such as uniquely designed sneakers or customizable gift baskets. This interest goes hand-in-hand with Gen Z’s preference for smaller businesses, as they are more likely to offer unique items such as handmade products.

Use of Mobile Finance


Gen Z is full of digital natives and is highly likely to use digital options whenever they are available. Mobile payment options such as Apple Pay are therefore highly appealing to many members of Gen Z, who are used to using their mobile devices for virtually all of their needs. Mobile payment options not only offer a convenient way to make payments, but also offer easier access to your accounts to monitor your spending.

Financial Anxiety

Financial anxiety broadly refers to any stress or other unhealthy preoccupations related to a person’s finances. As a generation reaching adulthood during uncertain times, Gen Z may be experiencing significant financial anxiety. However, this may be a temporary trend that diminishes as this generation ages and gains more financial literacy regarding things like loans, credit cards, and credit history.

While some of these trends may persist, it is reasonable to expect that other aspects of Gen Z’s financial habits will change as they age and they have to contend with financial variables around them.

About The Author

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Bryan Huynh

Product Tester & Writer

Bryan Huynh, a committed Product Tester and Writer, ensures that you are well-informed, guiding you in discovering and comparing top-rated financial services, including personal loans, business loans, credit repair, and tax relief.