Best Financial Tips For Gen-Z

. 5 min read
Best Financial Tips For Gen-Z

A Take On Gen-Z's Financial Habits

  1. Generation Z defines those born between 1997 and 2012.
  2. They are also referred to as digital natives because of their early exposure to the digital world.
  3. Media reports indicate that almost 95% of them either own or have access to smartphones.
  4. The average time spent online is over 4 hours.
  5. The estimated population of Gen Z in India is over 470 million.
  6. Gen Zers mostly grew up under healthy economic conditions in India (also globally) and are fortunate to have the best of education.
  7. Gen. Zers are on track to become the best-educated generation in India.

Where Do Gen-Zers Work?

  • Gen Zers are gradually joining the workforce in India.
  • A large number of them pursued (or are still completing) unconventional courses of study, believing in skills learnt on an equal footing with academic knowledge.
  • Their take on employment has a different dimension, and one organisation for life is something they do not believe and follow.
  • The world is closely connected today, and technology has opened up a vast new arena of business activities.
  • In tune with global trends, the rise of the short time assignments or contract jobs segment (also referred to as gig economy) is emerging as a significant segment of the Indian economy.
  • This short term job segment mostly depends on digitally enabled means and helps an individual's aspirations to be self-reliant.
  • This generation is perfectly tuned to this idea, and a large number of them are already working as freelancers employed in short-term or contract-based jobs.
  • Enterprising Gen Zers are seen in technology dependent or internet-enabled business activities.
  • Software development, graphic design and animation, digital editing are preferred professions of the Gen Zers.

Tips On A Better Financial Future Of Gen-Zers

  1. Saving money is a top priority for everyone, and the digital natives understand it well.
  2. Increased access to the internet has made them aware of the impact of economic recession, loan default and even retirement issues of an individual or a family.
  3. It is said that better information leads to better decision making and Gen Zers are showing matured decision making in matters of money.
  4. Starting early in one’s career with a personal financial plan is the best action for leading a comfortable life.
  5. Freelancers and contract employees have to apply the principles of savings from day one itself since there is no certainty about the future.

The following essential saving tips are time tested and apply equally to Generation Z.

1. Prepare a personal budget and monitor it closely.

A reasonable budget shows priorities. Identify expenses as fixed (electricity, insurance, loan repayment, rent, taxes, basic groceries) and discretionary (dining out, travelling, entertainment).

Monitoring spending is comfortable with the help of technology tools and Gen Zers should find it easy. A fixed percentage of the earnings, however small the amount , should be earmarked for savings—the habit of saving matters at the early stages of one’s career.

2. Live within your means.

Follow your budget strictly and resist lifestyle demands. It is a daily challenge to the Gen Zers to avoid the trap of Impulse purchase. This is easier said than done, but honestly, there is no alternative to this principle for living a comfortable life.

A challenging task at the beginning of the career, temptations, become more prominent and problematic to resist for everyone.

3. Pay credit card bills, loan instalments in time

To maintain a high credit score, timely payment of dues is essential. Delayed payment of credit card dues is a big trap for all users of cards. Interest gets compounded, late fees are charged, and you will end up paying Rs1600 against your original card dues of Rs 1000. The additional amount reflects late payment charges, interest (usually 3 to 4 % per month) and applicable taxes.

4. Build an emergency fund

This fund can cover urgent necessities like illness, temporary financial hardships, and functions in the family.

Uncertain work environment (independent professionals, freelancers in high-risk category) calls for more focus on emergency funds.

5. Wealth creation for retired life

Explore options with professional help for investments in mutual funds, equities, gold or property. A careful analysis of your debt-to-income ratio will facilitate better investment decisions.


The most significant advantage Gen Z have, is their ability to use digital technologies as solutions- they can use automated payments, apps tracking real-time spending, and budget planners to stay on the right path of financial management.

The end-to-end tech-driven fintech companies can provide help to Gen Z in planning their finance and also in their business.

Once savings are considered as a habit, it falls into a routine. This generation has better resources, better education and therefore, no doubts that they will do well in saving money too.

A few clear points to be remembered – no late payments for card dues, student loan (or any other) repayment is priority number one, and avoid impulse spending as much as possible.

Also read:

1) Top Financial Tips for Millennials or Young Adults
2) Best Tips for Customer Retention for a Small Business
3) Should You Hire a Financial Advisor if You Run a Business?
4) What Is the Best Advice for a Young, First-Time Start-Up CEO?


Q. I am a YouTuber specialising in travel videos and have decent earnings now – how to plan my savings?

Ans. You are on the right track - as an independent professional you can start a public provident fund account which offers higher interest than bank FDs.  PPF is a government-owned long-term savings scheme (15-years). You can withdraw conditionally after five years. The scheme provides yearly income tax benefit, and the accrued interest is also free of tax at the time of final withdrawal.

Single premium life-policies are an excellent option since you may receive lump-sum amounts at times. Bank recurring deposits are a good idea too, for building up a fund over the years. You can take help of online professional finance companies for guidance on the right investment portfolio for you.

Q. I am just out of college and work as a partner in my father’s business. Should I plan to build up my savings from now itself?

Ans. The time is just right for you to start saving. You have no family burden now, and investing a higher percentage of your earnings into savings will be easy.

Plan several categories for saving like emergency, health, events, travel. Since you are in a business, you will understand risk better and therefore, can look at equity saving schemes. You can easily research the various saving instruments currently available and pick on the ones which meet your long term objective. But always remember to choose a basket of schemes for saving.

Q. I have got a job outside my hometown through a campus interview. I have a study loan to repay. In case my repayment is delayed, will there be any problems in future?

Ans. After meeting your essential living expenses, you should plan for loan repayment. We have mentioned earlier in this article the problems associated with loan default. Besides higher payment (interest, penalties), you will credit score. The moment you can balance your budget, start saving.

Q. Will the essential savings tips be good enough for me to start a business after five years?

Ans. Essential tips are for anyone willing to live a planned life. The general savings structure applies to business as well. If you have a good business proposition and use your own money as seed capital, you can always find loans to fund your business. The scale, however, will depend on your plans.