Millennials and Generation Z are now the two most influential consumer groups, reshaping the global economy with their spending habits and financial priorities.
Understanding how each generation approaches money can help you improve your own finances — whether that means overcoming the guilt of impulse spending or finding a healthier balance between saving and enjoying life.
Who are Millennials and Gen Z?
Millennials (Generation Y) were born between 1981 and 1996. They grew up during globalization and witnessed the rise of the internet. Comfortable with technology and focused on self-expression, many also value financial stability after experiencing multiple economic downturns.
Generation Z (Gen Z) was born between 1997 and 2012. As the first true digital generation, Gen Z grew up with smartphones and social media. They consume information quickly, value personal space and diversity, and see the digital world as a natural extension of everyday life.
Read also: Millennials earn the highest salaries, Zoomers earn the lowest in Kazakhstan.
Groceries remain the biggest expense
Food is the largest spending category for both generations, although its share of the household budget differs significantly.
For Millennials, groceries account for as much as 67% of consumer spending. Many are raising families, making weekly grocery shopping a routine part of household life. Despite the growth of e-commerce, 51% still prefer shopping in physical stores so they can choose products themselves.
Gen Z allocates a much smaller share of its budget, roughly 12% to 15%, to traditional grocery shopping. According to Opeepl research, younger consumers favor prepared meals, food delivery and street food. Many cook at home early in the week but opt for restaurant meals or takeout from Friday through Sunday.
Takeout coffee has also become a regular expense, with about 15% of Millennials purchasing it frequently.
Online shopping: Research vs. values
Both generations are comfortable shopping online, but they make purchasing decisions differently.
Millennials tend to be practical shoppers. According to YooMoney research, they pay close attention to customer reviews, compare prices across multiple retailers and consider delivery speed before making a purchase.
Gen Z places greater emphasis on values. Many willingly shop secondhand through resale marketplaces and vintage stores and are more likely to support brands that promote environmental sustainability or social responsibility, even if it means paying higher prices.
What drives impulse purchases?
Impulse buying affects both generations, but the motivations differ.
For Millennials, unplanned purchases are often linked to stress or burnout. Retail therapy — buying an expensive candle, a new gadget or a designer item after a difficult workweek — is a common way to reward themselves.
Gen Z is more likely to make impulse purchases because of FOMO, or the fear of missing out, and the influence of social media creators. If a product goes viral online, many are willing to buy it immediately. Their spontaneous purchases are typically lower in value than those made by Millennials, who are more likely to make larger one-time splurges.
Investing: Conservative vs. high-risk
The biggest generational divide appears in investing.
According to the CFA Institute, Gen Z begins investing much earlier than previous generations, with about 56% of respondents saying they invest regularly. Digital investing platforms have made buying stocks as easy as ordering food through an app.
Gen Z is also generally more comfortable with risk. About 19% invest exclusively in cryptocurrencies, decentralized finance (DeFi) projects and non-fungible tokens (NFTs).
Millennials, by contrast, tend to favor more conservative investments. Nearly half avoid high-risk stock market trading, preferring traditional savings vehicles such as bank deposits and gold. Many also prioritize paying down debt, saving for home renovations or building a down payment for a home.
Experiences over possessions
According to McKinsey research, consumers increasingly prioritize spending on experiences over accumulating material goods.
For Millennials, travel and personal development are among the highest priorities. Research by GWI shows they often seek more than a relaxing vacation: 57% want to learn new skills while traveling, and 41% pursue adventure or other unique experiences. Many are willing to spend more on memorable family trips and high-quality travel.
For Gen Z, experiences often exist in the digital world. Opeepl estimates that young consumers spend about 24% of their discretionary income on digital products and services, including subscriptions, in-game purchases, donations to content creators and other digital content.
Financial lessons from both generations
Every generation has financial strengths as well as common pitfalls. Understanding those patterns can make budgeting more effective and reduce emotionally driven spending.
Tips for Millennials
If you tend to reward yourself with impulse purchases after a stressful week, consider setting aside about 10% of your income as a dedicated “fun money” budget. Having money earmarked for discretionary spending allows you to enjoy occasional treats without undermining your long-term financial goals or feeling guilty afterward.
Consider taking on a moderate level of investment risk by allocating a small portion of your savings to diversified index exchange-traded funds (ETFs), many of which can be purchased through banking or investment apps.
If you spend hours each week grocery shopping and comparing prices, consider setting up automatic payments and recurring deliveries for household essentials. The time you save can be spent with family, pursuing hobbies or simply relaxing.
Tips for Gen Z
If a viral TikTok product or a new in-game skin makes you want to buy immediately, add it to your cart and wait 24 hours before completing the purchase. In many cases, the impulse fades after a cooling-off period.
Cryptocurrencies, NFTs and startup investments can deliver high returns, but they also carry significant risk. Consider following a balanced approach by keeping 70% to 80% of your portfolio in more traditional investments and limiting higher-risk assets, such as cryptocurrencies, to about 20%.
If digital subscriptions, streaming services and in-game purchases consume a significant share of your budget, review your recurring payments every few months and cancel those you no longer use. The savings can be redirected toward travel, social activities or other real-world experiences.
