Millennial money is always interesting. This population of people simply sees things differently than others. They’re almost always compared to Baby Boomers or Gen Xers when it comes to money. However, as Gen Z now enters adulthood, it’s interesting to compare the two younger generations.
Which Generation is Which?
I always find it helpful to remember who we are talking about when we discuss the generations in this way. There is some debate about the specific years that define each generation, of course. However, generally speaking:
- Gen Xers were born between 1965 and 1979.
- Millennials, sometimes called Gen Y, were born between 1980 and 1994.
- Gen Zers were born between 1995 and 2015.
Each generation is shaped by the major experiences of their time. This, in turn, shapes their money habits. In other words, millennial money is defined in large part by what the generation experienced growing up.
9/11 and Millennial Money
A recent Business Insider article argues that 9/11 is the defining event of the millennial generation. People who were born in Gen Z simply don’t remember it happening. They’re affected by it, yes, but in a significantly different way than the millennials who experienced it full force.
People associate many different feelings and fears with 9/11. More than anything else, though, millennials seem marked with uncertainty about the future. What once seemed permanent turned out perhaps not to be. Of course, if your outlook is one in which the future is uncertain, that outlook is naturally going to shape your spending and saving habits.
Perhaps this has given way to problems with planning for the future at all. Research indicates that 52% of millennials do not have any retirement savings account. And yet, of that group with no retirement savings, 46% expect to retire before age 75 and an additional 12% expect to retire before 55. The numbers don’t seem to match the dreams, which suggests that perhaps they aren’t thinking realistically about the future at all.
The Great Recession and Gen Z Money
It might be too early to tell what the defining moment is for the Gen Z generation. However, The Great Recession has definitely had a huge impact.
Millennial children grew up in a time when the economy was relatively well off. Of course, there are variations in individual experience (which reflect privilege among other things) but overall, millennial kids didn’t worry too much about money when they were young. These were the kids that TV commercials targeted because they convinced their parents to buy things.
In contrast, Gen Zers have been affected by money insecurity due to The Great Recession. As a result, Gen Zers tend to learn about money at a younger age than the older cohort did. They are more concerned about their financial future. They’re conservative spenders. Millennials accrued a lot of debt for school, for example, whereas Gen Zers are more likely to hack their education to avoid that cost.
The Great Recession and Millennial Money
Obviously, millennials were also around for The Great Recession. However, it hit them at a different life stage, and that’s had a financial impact. Gen Zers learned about it from their parents. They saw reason to be concerned. They may have used the technology readily available at their fingertips to start earning income of their own. But they were still kids.
Millennials, on the other hand, were adults. They had student debt and were starting families – or postponing starting them precisely because of the cost. The result is that they had to use their money to get through those lean times, which means many of them have struggled to start building wealth for the future. The Gen Z kids are already putting pennies away for the next rainy day whereas the millennials are just trying to catch up.
Home Ownership Differences
One survey found that almost 60% of Gen Zers age 18-23 want to buy a house in the next five years. They are saving to do so. Perhaps that’s why they aren’t shy about asking for raises; research shows that 75% of Gen Z believes they should be promoted within their first year at a company.
In contrast, many millennials are still renting. One survey found that of those who are renting, 90% would love to buy a home … but fewer than 35% expect to do so in the next five years. Moreover, nearly 70% of those millennials who did buy homes actually regret doing so.
Read More:
- Millennials vs Baby Boomers When it Comes to Money
- of Millennials Have Retirement Accounts
- Why Robo-Advisors Are a Great Choice for Millennial Investors
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Kathryn Vercillo is a professional writer who loves to live a balanced life. She appreciates a good work-life balance. She enjoys balance in her relationships and has worked hard to learn how to balance her finances to allow for a balanced life overall. Although she’s only blonde some of the time, she’s always striving for total balance. She’s excited to share what she’s learned with you and to discover more together along the way.
FAQs
Millennials were somewhat better off than Gen X—those born between 1965 and 1980—when they were the same age. Zoomers, however, are much better off than millennials were at the same age. The typical 25-year-old Gen Z-er has an annual household income of over $40,000, more than 50% above baby-boomers at the same age.
What generation is best at saving money? ›
Millennials save the most on average every month at $535.50. Gen Z saves the second-most every month with an average of $489.20. Baby boomers save the third-most every month at $406.00 on average. Gen X saves the least across generations, though at a similar rate to baby boomers, with an average of $400.60 every month.
Which generation has the least wealth? ›
Younger American (millennial and Gen Z) families represented 33.4% of households and owned 9.2% of total family wealth (72% less wealth) in 2023. The baby boomers' shortfall was the smallest of the generations. SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.
Are millennials frugal? ›
Millennials are often maligned as a generation focused more on avocado toast splurges than fiscal responsibility. But the stereotype isn't always true. Plenty of millennials have proven they can budget. And a majority of people in this generation are now homeowners, according to RentCafe.
Which generation is the wealthiest? ›
A gigantic wealth transfer over roughly the next decade will likely make millennials “the richest generation in history,” according to a report from global real estate consultancy Knight Frank.
Who is the richest generation of all time? ›
Millennials stand to become the richest generation in history, after $90 trillion wealth transfer | CNN Business.
Which generation has it the hardest financially? ›
Gen Zers are having a harder time making ends meet, let alone building wealth. Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a recent Bankrate report.
Why does Gen Z not save money? ›
Although most Gen Zers and millennials don't expect a pension, the fact that retirement is decades away is probably why many haven't given thought to saving for it. But the sooner they start saving, the more time their money has to grow and compound and sustain them through their retirement years.
Are Gen Z more financially literate? ›
According to the US National Association of Plan Advisors (NAPA), Gen Z has the lowest level of financial literacy, with only 28% of questions being answered correctly on average.
Why do millennials have so little wealth? ›
Researchers claim the distribution of wealth among millennials is so uneven because the economic rewards for middle and upper-class lifestyles have increased, while those for the working class have either remained the same or declined.
Whether it's investment strategies, spending habits or confidence in their financial knowledge, each generation differs from one another when it comes to their finances. However, among all of the generations, it's Gen Z that is proven to have the lowest financial literacy levels.
Are millennials the richest generation? ›
Millennials may be 'richest generation in history'
Not only are their wages lower than their parents' earnings when they were in their 20s and 30s, after adjusting for inflation, but they are also carrying larger student loan balances, recent reports show.
Are millennials financially stable? ›
According to data from the 2019 U.S. Financial Health Pulse consumer survey, only 24 percent of Millennials are Financially Healthy. 81 These individuals are spending, saving, borrowing, and planning in a way that will allow them to be resilient in the face of unexpected events and pursue opportunities over time.
What culture is the most frugal? ›
The results by continent are as below:
Most frugal country in Asia: Singapore. Most frugal country in Europe: Ireland. Most frugal country in Oceania: Australia. Most frugal country in North America: Canada.
Do millennials think they will be millionaires? ›
More than one-quarter (27%) of Americans say they're obsessed with the idea of being rich. This was especially true for younger generations with 44% of Gen Z and 46% of millennials admitting to being obsessed with the idea.
Is Gen Z the richest generation? ›
The shift will see $90 trillion of assets move between generations in the U.S. alone, making affluent millennials “the richest generation in history” by Knight Frank's estimation. Separate figures show that Gen Z is set to cash in too.
Are Gen Z making more money? ›
The Economist notes that Gen Z is experiencing the highest “young person premium” in terms of hourly pay growth since data collection began in 1998. Recently, the U.S. pay growth for those 16 to 24 grew 13% in one year, compared to just 6% for older employees aged 25 to 54.
Does Gen Z have more money? ›
Gen Z is richer than just a few years ago—and much richer than their parents at the same age—but everything costs more and they have more debt, Pew study reveals. Gen Z is making more money than their parents at their age, but they still have to deal with higher costs of buying a home and college.
Is Gen Z or millennials bigger? ›
A Millennial is anyone born between 1980 and 1995. In the U.S., there are roughly 80 million Millennials. A member of Gen Z is anyone born between 1996 and the early-mid 2000s (end date can vary depending on source). In the U.S., there are approximately 90 million members of Gen Z, or “Gen Zers.”
