Every generation carries its own stereotypes. Boomers are often seen as traditionalists, Millennials as cautious planners, and Gen Z as impulsive spenders splurging on gadgets, sneakers, and experiences. At family dinners, they are often told to “save for the future” and warned not to live paycheck to paycheck.
But are these labels actually accurate? When it comes to saving money, are Millennials truly more disciplined, or is Gen Z quietly outpacing them? The answer is more complex than the stereotypes suggest — and recent data paints a surprising picture.
Numbers Tell a Different Story
A study comparing generational saving habits found that Millennials save a higher percentage of their income on average, with a score of 2.83 versus Gen Z’s 2.09. This indicates that Millennials are still slightly more consistent savers overall.
However, other surveys show that Gen Z saves as much as 36% of their monthly income — the highest proportion among all generations. This means that despite earning less, they are setting aside a significant share of their income. Their 401(k) retirement accounts also show faster growth rates than Millennials’, with a 15% increase in the first quarter of 2025 compared to Millennials’ 11%.
This points to a key difference: Gen Z may save smaller absolute amounts because they earn less, but they are often saving more aggressively relative to their income.
Emergency Funds: Millennials Still Ahead
When it comes to emergency preparedness, Millennials maintain an edge. Data shows that:
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34% of Gen Z have no emergency savings at all, compared to 28% of Millennials.
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Only 10% of Gen Z can cover six months of expenses, whereas 25% of Millennials can.
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About 55% of Gen Z lack three months of emergency savings, compared to 49% of Millennials.
This suggests that Millennials have built up a more stable safety net, perhaps because they are further along in their careers, earn more, and have experienced more financial shocks, such as the 2008 recession or pandemic-related job losses.
Different Motivations and Priorities
The reason each generation saves also differs:
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Gen Z is heavily influenced by social media financial advice, focusing on investments, quick wealth-building tips, and experiences like travel. They are more optimistic, with 84% believing their financial situation will improve.
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Millennials are typically saving for long-term milestones: buying homes, weddings, paying down education or housing loans, and supporting families.
Gen Z is also more likely to view loans positively, with 73% saying affordable credit helps them achieve life goals, compared to 64% of Millennials. This reflects a higher comfort with debt — something that can be both empowering and risky if not managed well.
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The Role of Technology
Digital tools have completely changed the way younger generations manage money.
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55% of Gen Z use advanced budgeting or investment apps, helping them stay disciplined despite their lower incomes.
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Many use features like automatic savings transfers, expense tracking, and goal-based investing to stay on track.
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Millennials also use digital tools but at slightly lower adoption rates, often relying on traditional banking products and manual tracking.
This tech-first approach means Gen Z has the potential to build better habits early — provided they avoid overusing instant credit services or speculative trading platforms.
Challenges Each Generation Faces
Despite their differences, both groups are navigating difficult financial realities:
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Gen Z’s Challenges:
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Rising cost of living and housing prices.
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Lifestyle pressures amplified by social media (latest phones, fashion, travel).
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Lower starting salaries compared to inflation, which limits their capacity to save.
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A tendency to indulge in frequent “small treats,” which can add up and impact savings.
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Millennials’ Challenges:
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Many entered the job market during or after the 2008 financial crisis, affecting early career earnings.
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They often juggle high-interest education or home loans.
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They face the pressure of supporting both children and aging parents simultaneously (“sandwich generation”).
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Both generations have seen a drop in the number of people who are able to save in 2025 compared to 2024, which reflects overall economic pressure.
Lifestyle Choices and Sacrifices
One notable trend is that 69% of Gen Z reported making lifestyle sacrifices to save more, compared to 62% of Millennials. This shows Gen Z is willing to cut down on spending when needed, possibly because they are still forming their financial habits and are more adaptable.
This behaviour is promising — if Gen Z can sustain these habits as their incomes grow, they could surpass Millennials in wealth accumulation in the long term.
Expert Advice for Both Generations
Financial experts emphasize the importance of automating savings. “Spend what is left after saving” is a simple but powerful principle.
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For Gen Z:
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Prioritize building an emergency fund before splurging on lifestyle purchases.
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Be cautious of investment tips from unverified influencers and focus on long-term goals.
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Avoid over-reliance on credit-based apps that encourage impulsive spending.
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For Millennials:
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Continue saving steadily but work on clearing high-interest debt quickly.
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Increase retirement contributions as incomes rise to take advantage of compounding.
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Diversify investments to protect against market volatility.
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The Bottom Line
So, who is better at saving money — Gen Z or Millennials? The answer isn’t as black and white as stereotypes suggest.
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Millennials currently have higher absolute savings and stronger emergency funds thanks to more years of earning and a focus on major financial milestones.
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Gen Z, however, is more disciplined relative to their income, more tech-savvy, and quicker to adapt — traits that could make them better savers in the long run as their incomes rise.
The generational debate may miss the bigger picture: both groups are actively trying to secure their financial futures despite economic headwinds. The real takeaway is that good financial habits, smart use of technology, and a focus on long-term goals matter more than age labels.
