Millennials vs. Gen Z I Who’s Smarter with Money in 2025?

In recent years, financial behaviors have shifted significantly—and much of that change can be attributed to the rising influence of Millennials and Generation Z. While both groups are navigating economic challenges that differ starkly from those of previous generations, their approaches to money management offer a compelling contrast.

So, which generation is getting it "right" when it comes to saving, spending, and investing?

Let's take a closer look at how these two groups are approaching financial wellness—and what we can learn from both.

Generational Snapshot

• Millennials: Born between 1981 and 1996, Millennials are now in their late 20s to early 40s. Many began their careers during or just after the Great Recession and are currently in their prime earning years.
• Generation Z: Born between 1997 and 2012, Gen Z includes teens through young adults in their mid-to-late 20s. Most are early in their careers or still completing their education. They came of age during the COVID-19 pandemic and have never known life without digital technology.

Both generations are redefining traditional financial milestones—but their paths diverge in interesting ways.

Savings Trends

Millennials faced delayed financial starts due to student debt, a tight labor market post-2008, and rising living costs. Despite this, they've made progress:

• Average Millennial savings: estimate $29,000 (as of 2024)
• Millennials with $0 in savings: estimate 20%

Gen Z is entering adulthood with a more proactive mindset toward saving—likely due to observing Millennial struggles and having earlier access to financial tools:

• Average Gen Z savings: ~$10,000 (note: this group is significantly younger)
• 70% of Gen Zers began saving by age 20
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Key Takeaway: Gen Z is building saving habits earlier, aided by technology and increased financial literacy. However, Millennials are catching up and gaining momentum in their peak earning years.

Spending Behavior

While both groups value conscious spending, their priorities differ:

• Millennials are more likely to spend on experiences, wellness, and family-related expenses. Despite cultural narratives about "frivolous spending," they often exhibit thoughtful consumption behavior aligned with life stage demands.
• Gen Z tends to be price-conscious and values-driven. Many favor secondhand shopping, are loyal to brands with ethical practices, and prefer budget-friendly options over luxury items. However, Gen Z also shows a higher tendency toward impulsive purchases through Buy Now, Pay Later (BNPL) platforms.

Key Takeaway: Gen Z is entering adulthood with greater debt awareness, opting for cost-effective education options and more conservative credit use. Millennials, while more burdened, are showing resilience through debt repayment and refinancing strategies.

Debt Management

Debt continues to be a major factor in financial well-being—and here, the generational gap is especially telling:

• Millennials carry higher average student loan balances (estimate $33,000) and are more likely to carry revolving credit card debt.
• Gen Z has lower average student loan debt (estimate $20,000) and is more credit-averse, with fewer members using or carrying balances on credit cards.

Key Takeaway: Gen Z is entering adulthood with greater debt awareness, opting for cost-effective education options and more conservative credit use. Millennials, while more burdened, are showing resilience through debt repayment and refinancing strategies.

Investment Strategy

Investing is one area where both generations are gaining ground—but their methods differ:

• Millennials tend to favor traditional retirement accounts (e.g., 401(k), Roth IRA) and low-cost index funds. Many were early adopters of robo-advisors and financial apps.
• Gen Z shows a more aggressive appetite for risk. Crypto, individual stocks, and thematic ETFs are common entry points. Micro-investing platforms and social media have played a significant role in driving engagement—but sometimes at the expense of sound financial advice.

A 2024 Fidelity report found that 30% of Gen Z investors turn to platforms like TikTok and YouTube as primary sources of financial education.

Key Takeaway: Millennials prioritize long-term, diversified strategies, while Gen Z favors accessibility and experimentation. While both approaches have merit, investor education remains critical—particularly for Gen Z.

Financial Priorities & Goals

• Millennials are focused on long-term goals like retirement planning, homeownership, and family financial stability.
• Gen Z values financial independence, flexibility, and entrepreneurship. Many prioritize side hustles, remote work, and early investing over traditional wealth-building milestones.

Interestingly, homeownership is less of a priority for Gen Z, with many viewing it as financially out of reach or incompatible with their desired lifestyles.

Key Takeaway: Millennials are working toward traditional financial milestones. Gen Z is redefining what success looks like—with a focus on freedom and autonomy rather than ownership.

Technology & Tools

Both groups are comfortable with digital finance tools, but Gen Z is native to mobile-first platforms:

• Gen Z leads in usage of neobanks, payment apps, and AI-powered financial assistants.
• Millennials blend newer tools with more traditional financial institutions, showing a broader range of trust and engagement.

Key Takeaway: Gen Z's adoption of tech gives them greater financial agility, but may come with higher exposure to misinformation. Millennials' balanced approach provides more structure but may lack speed or innovation.

Who Comes Out Ahead?

So—who's winning the money game?

It depends on how you define success:

• Gen Z is disciplined, tech-forward, and proactive—building habits earlier and embracing flexibility.
• Millennials are strategic, resilient, and increasingly financially stable after a rocky start.

Both generations are forging new paths—leveraging digital tools, redefining wealth, and challenging outdated norms. And that's a win for the future of personal finance.

Sources:

Bank of America Gen Z & Millennial Financial Report (2024)

Pew Research Center

NerdWallet & LendingTree Gen Z vs. Millennial Spending Habits Survey (2023)