Is Gen Z Bad With Money, Or Just Misunderstood?
Is Gen Z Bad With Money, Or Just Misunderstood?
Scroll through any finance discussion today and you’ll hear a familiar refrain: “Gen Z doesn’t know how to handle money.” Too impulsive. Too digital. Too dependent on cashback, BNPL, and UPI. But is that really true? Or are we judging Gen Z by outdated financial rules in a completely new economic reality? Let’s look at the data, the context, and the behaviour specifically in India before we decide.
Scroll through any finance discussion today and you’ll hear a familiar refrain: “Gen Z doesn’t know how to handle money.” Too impulsive. Too digital. Too dependent on cashback, BNPL, and UPI. But is that really true? Or are we judging Gen Z by outdated financial rules in a completely new economic reality? Let’s look at the data, the context, and the behaviour specifically in India before we decide.
First, who exactly is Gen Z in India?
India’s Gen Z (roughly born between 1997–2012) is the largest young consumer cohort the country has ever seen. According to multiple industry and policy reports, they already make up over 35% of India’s workforce-in-waiting and account for a rapidly growing share of digital payments, fintech adoption, and online consumption.
But they’re also entering adulthood during:
Rising living costs
Stagnant entry-level salaries
A gig-heavy job market
And near-total digitisation of money
This matters because money behaviour doesn’t exist in isolation.
The “bad with money” stereotype, where it comes from
The criticism usually revolves around three things:
High spending on lifestyle & experiences
Low traditional savings (FDs, RDs)
Heavy reliance on UPI, BNPL, and digital-first tools
On the surface, it looks reckless.
But dig deeper and the picture changes.
What the data actually says
1. Gen Z spends more, but not mindlessly
Indian consumer data consistently shows Gen Z spends more on:
Food & dining
Subscriptions
Education & skill-building
Experiences over assets
But here’s the key insight: their spending is intentional, not accidental.
Unlike previous generations, Gen Z tracks money digitally, not mentally. They rely on apps, statements, and dashboards, not passbooks or memory.
Spending visibility has increased. Judgment has not.
2. They save less traditionally, but plan more consciously
Yes, Gen Z saves less in fixed instruments like FDs.
But that’s partly because:
Interest rates barely beat inflation
Long lock-ins feel risky in uncertain careers
Liquidity matters more than “parked” money
Instead, Gen Z prefers:
Short-term savings goals
Flexible accounts
Cashbacks and instant value
That’s not irresponsibility, it’s risk- adjusted thinking.
3. Digital money ≠ careless money
India’s digital payments boom powered by UPI under NPCI, has fundamentally changed how money moves.
Gen Z didn’t “cause” this shift. They simply adapted fastest.
According to official payment data, young users dominate:
Daily UPI transactions
Peer-to-peer payments
App-based financial tools
But more transactions don’t mean more debt.
In fact, many Gen Z users avoid credit cards altogether, preferring debit-led or capped-spend systems.
That’s restraint, not recklessness.
The real difference: Control vs Discipline
Previous generations were taught discipline:
Don’t spend. Don’t touch savings. Lock money away.
Gen Z is optimizing for control:
Spend mindfully. Set limits. Avoid regret.
They don’t trust willpower.
They trust systems.
Monthly caps, alerts, real-time balances, cashback nudges, these are tools of intentional spending, not indulgence.
Why Gen Z looks worse with money (but isn’t)
Here’s the uncomfortable truth:
Traditional finance metrics don’t measure modern behaviour well.
Older frameworks value:
Long-term lock-ins
Delayed gratification
Asset-first thinking
Gen Z values:
Flexibility
Mental peace
Short feedback loops
So when we judge them using yesterday’s scorecard, they fail unfairly.
Are there real risks? Yes, and Gen Z knows it
This isn’t a defence of every habit.
Gen Z is aware of:
Overspending via frictionless payments
Subscription creep
BNPL misuse
That’s why we’re seeing a clear shift:
From “earn & spend” → “spend smart & stay within limits”
The conversation is evolving, from guilt to clarity.
The Indian context makes this even more important
India doesn’t have a strong culture of early financial education.
Most people learn money management by mistake, not design.
Gen Z is the first generation actively asking for better tools, not lectures.
They don’t want:
Fear-based advice
Moral judgments
One-size-fits-all budgeting rules
They want:
Transparency
Predictability
Freedom with guardrails
That’s not being bad with money.
That’s being honest about how money actually feels.
So… misunderstood?
If “good with money” means:
Never spending
Locking money away
Following outdated rules
Then yes, Gen Z fails.
But if it means:
Knowing where money goes
Staying within self-set limits
Avoiding long-term damage
Wanting clarity over control
Then Gen Z might be the most financially self-aware generation India has seen.
They’re not careless.
They’re cautious in a different way.
Final thought
Gen Z doesn’t need fixing.
They need financial systems built for the world they live in, not the one that existed before UPI, apps, and real-time money.
Maybe the problem isn’t how Gen Z handles money.
Maybe it’s how we’ve been measuring “good” money behaviour all along.
First, who exactly is Gen Z in India?
India’s Gen Z (roughly born between 1997–2012) is the largest young consumer cohort the country has ever seen. According to multiple industry and policy reports, they already make up over 35% of India’s workforce-in-waiting and account for a rapidly growing share of digital payments, fintech adoption, and online consumption.
But they’re also entering adulthood during:
Rising living costs
Stagnant entry-level salaries
A gig-heavy job market
And near-total digitisation of money
This matters because money behaviour doesn’t exist in isolation.
The “bad with money” stereotype, where it comes from
The criticism usually revolves around three things:
High spending on lifestyle & experiences
Low traditional savings (FDs, RDs)
Heavy reliance on UPI, BNPL, and digital-first tools
On the surface, it looks reckless.
But dig deeper and the picture changes.
What the data actually says
1. Gen Z spends more, but not mindlessly
Indian consumer data consistently shows Gen Z spends more on:
Food & dining
Subscriptions
Education & skill-building
Experiences over assets
But here’s the key insight: their spending is intentional, not accidental.
Unlike previous generations, Gen Z tracks money digitally, not mentally. They rely on apps, statements, and dashboards, not passbooks or memory.
Spending visibility has increased. Judgment has not.
2. They save less traditionally, but plan more consciously
Yes, Gen Z saves less in fixed instruments like FDs.
But that’s partly because:
Interest rates barely beat inflation
Long lock-ins feel risky in uncertain careers
Liquidity matters more than “parked” money
Instead, Gen Z prefers:
Short-term savings goals
Flexible accounts
Cashbacks and instant value
That’s not irresponsibility, it’s risk- adjusted thinking.
3. Digital money ≠ careless money
India’s digital payments boom powered by UPI under NPCI, has fundamentally changed how money moves.
Gen Z didn’t “cause” this shift. They simply adapted fastest.
According to official payment data, young users dominate:
Daily UPI transactions
Peer-to-peer payments
App-based financial tools
But more transactions don’t mean more debt.
In fact, many Gen Z users avoid credit cards altogether, preferring debit-led or capped-spend systems.
That’s restraint, not recklessness.
The real difference: Control vs Discipline
Previous generations were taught discipline:
Don’t spend. Don’t touch savings. Lock money away.
Gen Z is optimizing for control:
Spend mindfully. Set limits. Avoid regret.
They don’t trust willpower.
They trust systems.
Monthly caps, alerts, real-time balances, cashback nudges, these are tools of intentional spending, not indulgence.
Why Gen Z looks worse with money (but isn’t)
Here’s the uncomfortable truth:
Traditional finance metrics don’t measure modern behaviour well.
Older frameworks value:
Long-term lock-ins
Delayed gratification
Asset-first thinking
Gen Z values:
Flexibility
Mental peace
Short feedback loops
So when we judge them using yesterday’s scorecard, they fail unfairly.
Are there real risks? Yes, and Gen Z knows it
This isn’t a defence of every habit.
Gen Z is aware of:
Overspending via frictionless payments
Subscription creep
BNPL misuse
That’s why we’re seeing a clear shift:
From “earn & spend” → “spend smart & stay within limits”
The conversation is evolving, from guilt to clarity.
The Indian context makes this even more important
India doesn’t have a strong culture of early financial education.
Most people learn money management by mistake, not design.
Gen Z is the first generation actively asking for better tools, not lectures.
They don’t want:
Fear-based advice
Moral judgments
One-size-fits-all budgeting rules
They want:
Transparency
Predictability
Freedom with guardrails
That’s not being bad with money.
That’s being honest about how money actually feels.
So… misunderstood?
If “good with money” means:
Never spending
Locking money away
Following outdated rules
Then yes, Gen Z fails.
But if it means:
Knowing where money goes
Staying within self-set limits
Avoiding long-term damage
Wanting clarity over control
Then Gen Z might be the most financially self-aware generation India has seen.
They’re not careless.
They’re cautious in a different way.
Final thought
Gen Z doesn’t need fixing.
They need financial systems built for the world they live in, not the one that existed before UPI, apps, and real-time money.
Maybe the problem isn’t how Gen Z handles money.
Maybe it’s how we’ve been measuring “good” money behaviour all along.
