Research in Practice

Generation Z: Spenders or Savers? Three surprising insights about how they handle money

Generation Z (born between 1995-2010) can be considered deliberate spenders. Their future-oriented mindset and entrepreneurial spirit makes them conscious and serious about money. At the same time, peer pressure and the desire to blend in still results in impulsively buying mainstream or influencer-inspired goods, but within pre- and self-defined limits. Here are three differences between the Gen Z’s and Millennials that should be considered by marketeers targeting the Gen Z age group.

1. Gen Z earns money differently

All Millennials will remember their weekend jobs. We earned money by re-stocking shelves at the supermarket, waiting tables, picking fruit or vegetables or delivering the morning newspaper. For Gen Zs, weekend jobs are not really a thing anymore. Whereas 42% of Millennials aged 16-17 had weekend jobs (UK, 1997), only 18% of Gen Zs aged 16-17 had weekend jobs (UK, 2014, Ipsos Thinks Beyond Binary: The lives and choices of Generation Z – Ipsos MOR)).

One example that illustrates this difference, is the story of 12 year-old David in his first year in secondary school (qualitative research in Amsterdam, summer 2018 among eight Gen Zs, six girls, two boys. He wanted to make money without giving up his free Saturday to a boring, low paid job. So he bought a stack of pre-packed waffles and sold them piece by piece to his fellow classmates, a little cheaper than the waffles at the school canteen. It became a hit – for two weeks. Then his classmates were done eating waffles every day. So, he came up with a new initiative: bringing an electric toaster. He transformed boring cheese sandwiches into hot toasted sandwiches and sold them for a small fee. This initiative lasted only two days, unfortunately; then the school forbade the toaster due to fire safety. What does this tell us? Gen Zs are the early birds when it comes to having a business state of mind.

2. Gen Z perceives richness to be within reach

For me as a Millennial, money and capital are things that build gradually and will peak later in life. But, in the perception of Gen Zs, becoming rich is something that can happen to anyone and already early in life.  How come? Well, Gen Zs spend a lot of time watching the lives of similarly aged YouTubers/Vloggers/Influencers who became rich by videotaping their daily life, or certain activities. The Dutch Thorben (18) built a business by posting videos of himself while he plays Fortnite. He now makes a living from sponsoring and donations on his YouTube channel. Gen Zs witness their peers becoming rich quickly, which makes them think: If they can do it, why can’t I?

3. Gen Z is serious about spending money

Gen Z also behave differently from Millennials when it comes to monitoring and spending their money. It’s not that they do not spend money at all. Being in their teens and early twenties, like Millennials, they want to purchase similar clothes and goods as their peers, with the impulsivity that fits their age. However, where the spending frame of Millennials was exactly the amount of money available on their bank account, Gen Zs set boundaries for how much they can spend.  Thom (15) told me he uses Excel to keep track of the money that comes in and goes out. He wants to keep an overview, to predetermine how much money he has available to spend on larger expenses, like festivals, or on ‘impulses’, like gadgets and other goods.

Gen Z is a generation of deliberate spenders. They know the value of money, come up with smart ways to earn money, whilst waiting for their breakthrough as an influencer, and keep track of incoming and outgoing money flows to know what kind of impulse purchases they can afford.

For privacy reasons, names in this article are fictive.

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