Gen Z vs. Millennials: How Different Generations In India Manage Personal Finance

Introduction

Generational differences have always been around. And they are not just about fashion, food choices, or lifestyle. They also influence how people think about money. Personal finance may seem like a straightforward concept, but how each generation approaches saving, spending, and investing can be surprisingly different. Today’s two young generations – Millennials and Generation Z – may share the same memes and social media platforms, but their outlook on money could not be more different. From how they budget to the way they invest, their financial habits are greatly reflective of their priorities. 

Let’s take a closer look at how these two generations in India are managing their personal finances and what sets them apart. 

Gen Z vs Millennials - Generational Financial Mindsets

Millennials were born between 1981 and 1996, while Gen Z was born between 1997 and 2012. The years between them might not seem like much, but these two generations have grown up in very different worlds. The pace of change during this period has been unprecedented. The internet went from being a somewhat slow novelty to something we carry around in our pockets. Smartphones, social media, and instant payments became the norm just as Gen Z was growing up.

Millennials, on the other hand, were not born into this tech-first world. They had to watch it evolve and learn to adapt along the way. They saw the transition from physical bank branches to online banking and then to fintech apps. Naturally, they approached these changes with some scepticism at first. Gen Z does not share that hesitation. For them, digital-first financial planning feels natural. This is why Gen Z is more comfortable experimenting with fintech apps, UPI payments, and even cryptocurrencies. Millennials, while open to technology, still tend to be a bit more cautious and analytical before trying something new.

This difference in exposure has shaped their financial mindsets. Gen Z may be quicker to adopt new financial tools, while Millennials often take a vigilant approach. 

Savings Behaviour And Early Financial Responsibility

A survey showed that 58% of Gen Zs and 54% of Millennials have increased their savings since the start of 2025. Clearly, saving money is a priority for both generations.

Part of this saving mindset stems from their recent experiences. Both Millennials and Gen Z experienced the COVID-19 pandemic and the ensuing economic turbulence. Millennials, who were already in the workforce, saw their careers take a hit, while Gen Z faced a different set of struggles. They graduated into a job market that had practically shut down. 

However, the way they save still reflects their unique journeys. Millennials tend to focus on building a financial cushion first through emergency funds and insurance. Gen Z, meanwhile, is quicker to start investing thanks to easier access to fintech platforms and investment education on social media.

That said, savings habits are not just a generational thing. They are deeply personal. A Millennial or Gen Zer who has faced financial hardship early in life may be far more cautious and disciplined than peers who have not. 

Investment Styles: Gen Z vs. Millennials

Millennials are usually more strategic and focused on the long term. Many of them are diversifying across multiple assets, including mutual funds, stocks, retirement plans, and even real estate. They have had more time in the workforce and have seen a few market ups and downs, so they tend to think about stability and security just as much as chasing big gains. Millennials are also comfortable hiring financial advisors, especially now that many are earning well and can afford professional guidance. Millennials still love tried-and-true instruments like fixed deposits, long-term mutual funds, and Public Provident Fund (PPF), while Gen Z is gravitating toward high-risk, high-reward options. 

Financial planning for Gen Z is more about flexibility and liquidity. This generation is more likely to experiment with equities, crypto, Non-Fungible Tokens (NFTs), etc. Additionally, Gen Z is more DIY-driven. They rely on fintech apps, YouTube, Instagram, and even robo-advisors to learn about smart investments. Part of this is likely because they are still building their careers and may not have the budget to hire an advisor.

Influence Of Technology And Digital Literacy

Technology has played a massive role in how both these generations see personal finance. Millennials remember a time before fintech apps, online banking, and social media. This makes them a bit more cautious when it comes to relying entirely on tech. They may research online and use fintech apps, but they also value talking to peers or consulting financial advisors.

Gen Z grew up with technology, so managing money online comes naturally to them. They are more likely to trust fintech platforms and follow financial influencers. They may also use Robo-advisors, budgeting apps, and AI-driven financial tools. 

Borrowing And Credit Behaviour

When it comes to borrowing, both Millennials and Gen Z are quick to turn to digital platforms for online loans. However, for Gen Z, borrowing is often about experiences and lifestyle upgrades. Nearly 40% of their borrowing goes toward personal loans. 

Millennials are more likely to borrow for bigger expenses. Personal loans make up only about 21% of their borrowing. They also account for a much larger share of India’s total retail loan market. In FY24, Millennials borrowed between Rs 25-28 lakh crore, while Gen Z borrowed around Rs 3.5-4 lakh crore.  

Spending Attitudes And Lifestyle Investments

Millennials have had a head start when it comes to personal finance, and it shows. Many of them have already built emergency funds and have considerable balances in savings accounts. Gen Z is saving too, but they are also facing a very different world. The cost of living is higher, and social media often adds subtle pressure to keep up with trends.

Millennials had their own struggles, of course. Many entered the job market during the global financial crisis. They learned early on to prioritise stability and long-term financial planning. Gen Z is a little more experimental and open to exploring newer things. 

Short-Term Flexibility vs. Long-Term Stability

Millennials focus on the distant future and think about long-term goals. You will often see them investing in long-term instruments like PPF, mutual fund Systematic Investment Plans (SIPs), and equities that they plan to hold for years. 

Gen Z is more focused on the here and now. They value financial flexibility and are more likely to look for smart investments that offer liquidity and faster returns, such as stocks, cryptocurrencies, or even exploring side hustles.  

Conclusion

Both generations are playing a huge role in shaping India’s financial future. But they are doing so in different ways. Millennials are now stepping into the role of experienced mentors. They have seen a lot and have come out wiser. Their focus on financial planning and long-term investing is helping create a stable foundation for India.

Gen Z is not afraid to take risks, try new investment products, and prioritise personal happiness. They are also vocal about financial independence, which is changing the way personal finance is viewed in India.

Together, these two generations are driving India’s financial evolution faster than ever before.