By Shruti Joshi, Founder – Estrange Aurora
Introduction: The Changing Financial Landscape of Young India
India’s youth stand at the crossroads of economic transformation. The financial habits of millennials and Gen Z reveal two distinct paths fueled by changing social norms, digital tools, and evolving aspirations. While millennials strive for stability rooted in cautious planning, Gen Z chases opportunity with a tech-savvy and risk-embracing mindset. Yet, both generations face a shared challenge—saving and investing wisely amidst rising costs and unpredictable incomes.
This article unpacks their money-saving behaviors, challenges preconceived ideas, and highlights how these young Indians manage their money in 2025, supported by the latest research and local currency insights.
Millennials: Stability Seekers in a Fast-Paced World
Most Indian millennials earn an average of ₹33,000 per month, with expenditures around ₹20,000, leaving a tight band for saving. Despite this, surveys reveal only half were able to save consistently in 2025, a decline from 60% in 2024, underlining the growing financial strain many face.
Millennials often gravitate towards traditional, long-term financial instruments like Public Provident Fund (PPF), fixed deposits, life insurance policies, and mutual funds—sometimes investing ₹5,000 monthly in SIPs (Systematic Investment Plans). This cautious, structured approach reflects their experience growing up during India’s digital transition. They prioritize security over high-risk gains and frequently plan savings around key milestones like marriage, home purchase, or retirement.
However, this generation also contends with lifestyle inflation. Hanging on to stable jobs, millennials feel the pressure of rising rents, loan EMIs, educating children, and inflation. Despite earning steadily, savings often erode to meet day-to-day costs, and many lean heavily on digital tools like UPI, auto-debits, and mobile wallets to automate savings and bill payments. While automation simplifies money management, it can also lead to complacency, with many not adjusting their plans in response to changing market opportunities or goals.
Millennials tend to prefer stability and measured growth over sudden financial gambles—a mindset that offers protection but can limit wealth-building potential. As the Indian economy accelerates and markets evolve, this generation is challenged to embrace innovation alongside caution.
Gen Z: Early Adopters with a Digital Edge and Complex Challenges
India’s Gen Z—those roughly aged 18-26 in 2025—is rewriting money management rules. Mintel research notes that over 60% of Gen Z Indians begin saving before the age of 21, often allocating up to 20% of their earnings to savings and investments. With an average savings balance around ₹10,000, Gen Z is laying solid foundations, despite their youth and typically lower incomes.
This generation actively uses budgeting apps, instant loan platforms, and digital wallets, with 72% believing technology helps them achieve financial goals more effectively than previous generations. They also explore alternative income streams such as freelancing and content creation to supplement earnings, a stark contrast to millennials’ traditional employment preferences.
Gen Z’s spending habits are evolving: 44% regularly travel locally, and education comprises nearly 19% of their monthly spend—indicating a focus on self-development and experience. Additionally, 77% aspire to homeownership early in life, and 59% dream of owning cars. Value-conscious and socially aware, they prioritize cost-effective purchases and often rely on mobile platforms for discovery and transactions.
Yet, despite these strengths, Gen Z faces pitfalls:
Impulse spending driven by instant gratification, facilitated through Buy Now Pay Later (BNPL) and easy credit, can disrupt disciplined savings.
Income irregularity from gig work complicates budgeting and building steady emergency funds.
Overreliance on social media for financial advice sometimes leads to risky investments based on trends rather than fundamentals.
Almost a third admit not saving adequately for retirement, highlighting a gap in long-term planning compared to millennials.
Shared Realities: Tight Wallets, Aspirations, and Financial Literacy
Both generations confront the challenge of balancing ambitions with financial bandwidth. Despite aspirations and income growth, around 50% of millennials and Gen Z Indians live paycheck to paycheck, a sobering statistic impacting their mental well-being and long-term financial security.
Financial literacy emerges as a crucial determinant of success. Studies highlight that millennials tend to engage in more structured financial planning, while Gen Z leverages technology but needs guidance to filter quality advice from social buzz. Increasing access to digital financial services is a double-edged sword—it empowers but also exposes to risks without adequate education and discipline.
Personal Reflection: Navigating Between Tradition and Transformation
As a millennial entrepreneur, my financial journey blends old and new. I rely on trusted instruments like PPF and SIPs but also actively use digital fintech apps for investing and budgeting. Automation helped me stay consistent, but I have learned the importance of reviewing my portfolio regularly and being open to calculated risks.
Watching Gen Z’s early start in saving and their entrepreneurial hustle inspires me. However, I advise them to temper enthusiasm with patience and skepticism, prioritize building emergency buffers, and seek mentorship beyond social media trends.
Conclusion: Bridging Generations, Forging Financial Futures
Millennials and Gen Z are together shaping a new financial narrative for India. Millennials offer the discipline of measured, long-term planning, while Gen Z brings agility, tech savviness, and a willingness to innovate. Both, however, share a need for deeper financial literacy and smarter money management habits to overcome their respective challenges.
In 2025, India’s young must combine the strengths of both generations: the millennial focus on stability and planning with the Gen Z drive for innovation and early action. This fusion can unlock real financial empowerment, turning aspirations into wealth creation and well-being in rupees and resilience.
References
Economic Times. “Millennial financing meets Gen Z ways: How India’s young are rewriting the money script,” June 2025.
Deloitte. “Global Gen Z and Millennial Survey 2025.”
Mintel Reports India. “Indian Gen Z: Financially savvy, socially conscious and ready to travel,” June 2023.
LoansJagat. “Financial Planning for Millennials 2025 – What’s Actually Working?” June 2025.
EY India. “How financial services can evolve to stay relevant for Gen Z,” April 2025.
IndiaFirst Life Insurance. “Top 7 Financial Habits to Build a Better 2025,” April 2025.
Erigo India. “Millennials vs Gen Z Money Habits: Who’s Winning the Financial Game?” July 2025.
Investek. “Gen Z and Millennials: The Driving Forces Behind India’s Financial Revolution,” 2025.
Pew Research Center. Gen Z Spending and Financial Trends, 2024.
GWI. “Financial literacy across generations: How Gen Z, Millennials, and Boomers learn about money,” March 2025.
