Millennials vs. Gen Z: Who’s Winning the Savings Game?

Millennials and Generation Z share many similarities in their money habits, like prioritizing travel and entertainment over saving for retirement. But there are some key differences, as well. For example, millennials typically do a better job of saving than Gen Zers do.

According to New York Life’s Wealth Watch 2024, millennials saved $9,299.45 in 2023, while Gen Z saved $6,440.67. How do you compare and what could you be doing to up your savings game?

Key Takeaways

• Millennials (51%) are more likely to have emergency savings than Gen Zers (44%).
• Millennials and Gen Zers are more likely to take on a side hustle to meet their financial needs than other generations.
• Both millennials and Gen Zers find it difficult to say no to impulse purchases.

Millennials: Saving and Spending Habits

Ranging in age from 28 to 43, millennials prioritize saving, but face rising cost of living and debt payments. Even so, many were able to save nearly $10,000 in 2023. Plus, millennials (64%) invest in the stock market. They also favor ETFs (exchange-traded funds) and retirement accounts.

Gen Z: Saving and Spending Habits

Now between age 14 and 27, most Gen Zers are just now graduating high school or college, so personal finance has not been a primary priority before now. In fact, according to Intuit’s 2023 Prosperity Index Study, three in four Gen Zers said they would rather have a better quality of life than extra money in the bank.

Like millennials, the rising cost of living and paying off debt is a barrier to saving. Rather than saving for retirement, many people in Gen Z are saving for a new vehicle.

Savings by Generation: Goals Vary by Age

Compared to other generations, millennials save the most while Baby Boomers save the least. Of course, that’s because most Baby Boomers are retired or headed toward retirement, while millennials are actively working and saving for retirement. 

Tips and Strategies to Increase Your Savings

To maximize your savings, there are several strategies you can try. 

• Start Early: The earlier you start, the more you can save. 
• Cut Back on Unnecessary Expenses: Reducing how much you spend on entertainment or other nonessential items can increase savings.
• Use a High-Yield Savings Account: These accounts earn more than traditional savings accounts. 
• Build a Budget: Knowing how much you need for expenses can reveal how much you have for savings. 
• Build an Emergency Fund: You don’t want to be caught off guard by unexpected car repairs or medical bills. Try to save three- to six months’ worth of expenses in your emergency fund.
• Build Credit: Having a good credit score and a healthy credit report will help you when you want to buy a house or vehicle. 
• Tackle High-Interest Debt First: This maximizes your cash for other expenses or savings. 
• Automate Your Savings: Setting up automatic deposits means you save before you can spend. 

The Bottom Line

While both millennials and Gen Zers save, they are challenged by high living costs and debts. Still, there are things you can do that can help you save, from automating your savings to using a high-yield savings account. Building good financial habits now can result in big savings later.