At a Glance

From attitudes about spending and investing to student loans, Gen Z and Millennials differ in a few key ways when it comes to money.

Millennials and Gen Zers were born into different eras (yet they all still dress like it is 1996) – and those differences show in the way they approach money. First, millennials remember life pre-internet, while Gen Zers are the first generation to have grown in a fully digital era. Millennials have also faced the worst economic odds in history, with two recessions and a pandemic under their belt. Meanwhile, Gen Z is 27% more likely than other generations to suffer from poor mental health, according to an APA survey on stress – Gen Zers are feeling the weight of concerns such as mass shootings and other current events.

The social climate in which each generation came into adulthood brings nuances in the way each generation handles finances. Here are four ways Gen Z and millennials differ when it comes to money, from spending and investing habits to student loans.

Millennials are idealistic while Gen Zers are pragmatic

The stereotype goes like this: Millennials are entitled and spend too much on lattes and avocado toast. The reality is more like, millennials graduated and entered the workforce during an economic catastrophe and have struggled to reach financial milestones such as buying a home and saving for retirement. Perhaps that’s why they are concerned about living (and buying things) with meaning – the near-guaranteed upwards mobility that existed for their parents was never a thing for them.

As a result, they are more likely to spend on companies that align with their values. 83% of millennial women, one of the most powerful demographic groups in terms of buying power, say that a brand’s sustainability practices influence their buying decisions, according to a research report release by Merkle

Millennials also focus on working to live instead of living to work – they prioritize spending on experiences, according to McKinsey. On the other hand, Gen Z is more price-conscious and pragmatic, focusing on long-term security, says a Salesforce report. It makes sense: Gen Zers also came of age in a turmoiled economy but they experienced less privilege in childhood than their millennial counterparts, so it’s manifesting differently in their spending habits.

Gen Zers are redefining personal finance

So Gen Zers care about long-term financial stability, and they were also born with cellphones in their hands.The result? A new era of personal finance, which Gen Z is ushering through TikTok trends such as cash stuffing. Gen Z is the most video-forward generation when it comes to learning about personal finance, and they know more about managing money at an early age than other generations thanks to social media, according to Investopedia. Gen Zers are also hungry to grow their net worth online, from building side hustles to turning them into straight-up empires.

Millennials prefer DIY investing

While Gen Z is eager to learn how to put their money to work – and that knowledge may come from less traditional sources than personal advisors, millennials are fans of figuring it out on their own. A poll conducted by revealed that over a third of Canadian millennials will drop their financial advisors in favor of DIY platforms. Gen Zers follow closely behind, but their reasons for doing so slightly vary: they want to feel more in control of their money, while millennials enjoy the convenience and innovation of new online investment options.

Gen Z is terrified of student loan debt

It could be fair to say that Gen Z ended up being more practical because they saw millennials suffer from the weight of student loan debt. Paying off student loan debt is top of mind when it comes to Gen Zers’ career choices, with 61% of college students reporting they would take a job they’re not passionate about due to the pressure to pay off their student loans, according to a Handshake survey.

That being said, Gen Z may generally be dealing with better conditions than millennials as far as student loans. “Gen Z borrowers should expect better loan servicing and less complicated rules,” said Michael Lux, a millennial attorney and the founder of Student Loan Sherpa, in a GoBankingRates blog post.

According to Lux, many millennials were left to their own devices navigating complicated student loan rules. Loan servicers are now more accountable and there have been efforts to simplify student loan repayment, which should make student loan management easier for Gen Z.

Bottom line

One thing is for sure: Both Millennials and Gen Z benefited from less financial stability than older generations. It’s translating into valuing different things when it comes to money while also shaping the future of the workforce and personal finance trends.