What Defines Gen Z Money Habits

Move over YOLO (you only live once) and FOMO (fear of missing out), some of the trends that often dictated and affected the decisions, including those related to money, of the millennials (born between 1981 and 1996). These words often defined their impulsive decisions and risky behaviour, especially when it came to finances. The Gen Zs (born between 1997 and 2012) have their own language and trends that define and establish how they invest, spend and view money decisions.

Every generation defines its own milieu and era through its language. This informal set of loosely defined words in turn becomes the zeitgeist in creating the culture of each generation. With the change in generation, there is always a new set of concepts and understanding, giving rise to a whole new lingo. And after the millennials, Gen Zs, who rely heavily on the Internet, have created their own lingo.

Many among the Gen Z, the digital-first generation, imbibed the digital culture big time during the Covid restrictions through 2020 and a part of 2021. As digital natives, who have had unrestricted access to the Internet for the better part of their lives, Gen Z’s lingo is extremely contemporary and topical. This lingo is created, followed and perpetuated across various social media platforms, such as Reddit, Instagram and YouTube, becoming a truly global phenomenon.

While older generations may brush off these terms and trends simply as Gen Z’s knee-jerk reactions to the world around them, the story is far more complex. These trends are a reflection of their dreams, desires and insecurities, often serving as a guiding force for their spending, saving and investing decisions amid massive uncertainties, which are a part of their coming-of-age story.

We have captured some mint fresh personal finance trends, which get to the core of what makes Gen Zs tick. We plotted such trends across the traditional pillars of personal finance—save, spend and invest—to understand what they mean and whether they can help Gen Zs make sane financial decisions.

How Gen Z Spends

In 2025, we still do not have flying cars, but we do have delivery apps which provide instant gratification. The Gen Zs are not alien to this development; in fact they have contributed in a huge way to the retail boom in India. As the retail boom leaves pockets empty and hands full, let’s ‘unbox’ two key trends in Gen Z spending.

Doom Spending: Gen Zs have already been through the Covid 19 pandemic and constant geopolitical upheaval, all before turning 25. These events in turn have created a perpetual sense of “doom” among them.

These gloomy scenarios have given rise to the feeling of things being doomed, which has in turn created the urge to splurge like never before. Enter “Doom Spending”, an Internet phenomenon wherein young people drive the demand for all things premium, often going way beyond their means. From designer clothes to exotic vacations, this attempt to self-soothe in troubled times is becoming more and more common among Gen Zs.

While the exact etymology of doom spending is unclear, it is likely that the term originates from the “Doomer” meme seen on Reddit threads. The Doomer, often depicted as a gloomy figure dressed in black, symbolises a sense of giving up and hopelessness, and taking up unhealthy habits to cope with reality. It is likely that the figure of the Doomer slowly gave rise to the term doom spending.

Michelle Lillian, 22, a final year masters student of Economics at St Xavier’s College, Mumbai, told Outlook Money that often doom spending happens because it is easy to spend money online and get manipulated by the online marketplace.

Says Michelle: “I feel like it’s very easy to spend your money because finding things and shopping online has become easy. So if an item catches my eye online, then I will see something else (which is similar) that’s on sale, and I will get that. I feel like the market has been so designed where people spend without realising it. It’s about how easily you can be manipulated by the market and how easily you can spend without even realising how much.”

Such impulsive spending, ostensibly to fight the sense of doom, is similar to retail therapy, and can often spell doom for your short- and long-term finances if you are not careful. That’s because such behaviour doesn’t make you pause to differentiate between your needs and wants, and might often tempt you to fall for schemes such as Buy Now Pay Later (BNPL), which can charge you high fees and penalty, especially if you default on payments. So, what can you do about that?

Sidhant Daga, a certified financial planner (CFP) and co-founder of Artha Capital, a Securities and Exchange Board of India (Sebi)-registered research analyst firm, who is himself a 27-year-old Gen Z, shared some tips on how Gen Zs can curb the urge to doom spend.

Says Daga: “Most of the doom spending is happening because of social media. Such spending happens because of influence rather than being driven by one’s needs. So, the first advice is to clearly differentiate between impulse spends and necessities. Second, I believe that one should treat their savings as a cost. For instance, if I invest 20 per cent of my income at once, I won’t be left with money to splurge. So, something like investing a chunk as soon as you get your salary can help.”

Girl Math And Boy Math: Retail therapy is not exactly new, but the way Gen Zs approach it is novel. While the millennials often experienced pangs of guilt after frivolous spending, Gen Zs believe in rationalising the same with terms such as “Girl Math” and “Boy Math”, albeit in a self-aware manner.

In late 2024, the term Girl Math started trending in the US on TikTok. Soon the term found currency on Indian Instagram accounts as well. The origin of the trend is credited to TikToker Samantha Jane, who famously said “anything under $5 feels free”.

As is common with such trends, the term kept gaining relevance with more and more young women adding their own interpretation to the mix. Some of the more viral ones include adding extra items to your order to qualify for free shipping.

Michelle explains how it really works. “Girls are good at shopping, they kind of have their girl math to justify them being good at shopping. There are many times where I’ve made a payment for something in advance, like maybe it’s a concert ticket or a trip. And when the date comes, it’s like, I’m going for free because we forget that we’ve already paid for it earlier.”

What Michelle says is more about advance planning and making the most of the buck, for those who are mindful of that. The disturbing part is that women’s spending patterns are often ridiculed on the basis of this trend.

Elena Amolik, 25, a CFP and assistant manager - financial concierge team at 1Finance, a personal financial planning services firm, says that she sees the trend as a fun and humorous take on spending, but at the same time it can perpetuate pre-existing long-standing stigmas around women and finance.

There’s another iteration of the term, which emerged soon after and targeted young men. This term, Boy Math, also refers to frivolous spending habits, but by men. It is about how men spend more money than needed on some things and justify it as an investment.

Some popular examples of boy math in meme culture on the Internet include buying an expensive car on credit in order to motivate oneself to earn more. Other examples include viewing overtly expensive spending on sneakers as investing in assets.

Sahej Sahni, 25, a product manager at a Delhi-based customer experience analytics platform, explains the term, citing his own experience. “Boy Math for me is like spending on tools (such as drilling machines). It does not make a lot of sense. I only used it once, but I keep buying tools because at a principal level I want to own this, and buying a tool makes me feel like all of a sudden I can do more in this world. So I am much more of a provider than ever.”

How Gen Z Saves

While Gen Zs are high on spending, often without giving a thought to their future, but harsh realities such as the rising cost of living are changing their beliefs about saving. Whether out of need or necessity or just an urge to follow trends, Gen Zs are also trying hard to inculcate a savings habit.

A report by digital lending platform Fin One, titled Young Indians’ Saving Habits Outlook 2024, showed that out of the 1,650 respondents, nearly 1,537 set aside 20-30 per cent of their monthly income for financial goals and identified themselves as regular savers. Notably a large chunk of these "savers" were Gen Zs aged 22-25 years. The study found that Gen Zs who have joined the workforce recently are trying to form a savings habit to plan for their financial future.

No wonder then that trends advocating frugality are becoming popular among Gen Zs. Here are some of them.

Loud Budgeting: This is a practice wherein Gen Zs throw social norms to the wind to wear their frugality on their sleeves. Typically, admitting you’re short on cash has a sense of defeat to it, but a few Gen Zs have flipped the script and have not only normalised, but glorified being vocal about such shortages.

The practice involves declaring openly and boldly that you are on a strict budget and do not wish to spend money on social activities, such as going to the movies, eating at a new cafe, or other such fun activities. Unlike their millennial predecessors, some Zoomers are ready to skip an outing or two even at the cost of missing out on things, reversing the FOMO trend.

Michelle and her peers often engage in loud budgeting. Saying “no” to certain activities when they seem out of budget helps her to take accountability for her life choices. “I have practised loud budgeting, especially in college. Towards the end of the month, you have to be honest and open about it. It’s not about saying, I don’t have enough money, it’s about being accountable and saying, hey, listen, this is my budget and I’m gonna take a back seat on this. I feel like loud budgeting is very useful and it’s something that should be encouraged,” she says.

That’s indeed true and is a healthy habit that can help you stay within your budget. It is something that can ultimately lead you on the path to budgeting, and encourage you to make saving a part of your budgeting exercise.

Daga highlights the various benefits of loud budgeting and how it can help Gen Zs spend and save in a more conscious manner.

“Gen Zs are getting more aware as to how to handle their finances, that’s why the loud budgeting concept is there. Everyone has a different budget and everyone wants to save and invest. Being aware of the percentage as to which they can spend helps them to decide whether they want to spend more or less, and leave money for savings and investments,” says Daga.

Cash Stuffing: In a trigger-happy world where Unified Payments Interface (UPI) transactions take place at the speed of light, some Gen Zs are returning to hard cash in an effort to curb the itch to spend.

UPI transactions reached an all-time high in March 2025, as Rs 24.77 lakh crore (nearly $289.26 billion) exchanged hands through 19.78 billion transactions.

However, Gen Zs are counting themselves out from the QR code scanning and card-swiping activities by engaging in a trend called ‘Cash Stuffing’.

It is almost like going back to what the older Gen X (born between 1965 and 1980) members used to practice. It involves the cash envelope system, where you mark different envelopes for different planned cost heads. The practice involves setting a budget for each expense and then keeping a separate amount of cash for each of these trends to pay for things as they come up. Gen Zs are doing all this with the goal of becoming more mindful of their spending habits, as the psychological weight of a cash transaction feels more tangible than a lightning-fast digital one.

Varad Gore, a 25-year-old data research analyst at a Mumbai-based research firm, says that when making cash transactions, one does not wish that the spending exceeds the cash they are carrying. “On the other hand, UPI users are more likely to extend their spending beyond what they have planned,” he says.

How Gen Z Invests

Many Gen Zs are also expanding their horizons to try their hand at investing.

According to data from the National Stock Exchange (NSE), the total number of active demat account holders was 107 million as of November 2024, a record figure, which has been growing since 2020. Though the growth in numbers has fallen marginally, there are additions to this even in the recent volatile markets. NSE added that between March 2020 and November 2024, nearly 50 per cent of new demat account openings were by investors under the age of 30 years. Here’s a look at some key trends and themes that defines Gen Z investing behaviour.

De-Influencing: As is the case with saving and spending, Gen Zs inadvertently go to the Internet for investing advice as well (read Are Online Knowledge Sources Helping Gen Z Crack The Investing Code? Page 26). This, in turn, has given rise to finfluencers and other forms of online learning platforms.

However, not everyone among the Gen Z necessarily subscribes to such influencers, giving rise to trends such as De-Influencing.

De-Influencing or reverse influencing is a trend wherein members of the Gen Z go against the grain to find what works for them as opposed to subscribing to advice dished out by finfluencers. The trend comes amid a rising sense of distrust wherein finfluencers were found giving advice without being properly regulated by capital markets regulator Securities and Exchange Board of India (Sebi), or were peddling courses in the guise of enhancing viewers’ financial literacy.

The origin of the de-influencing trend stems from the beauty and lifestyle genre of content, where viewers often found influencers endorsing beauty and lifestyle products for money without disclosing the fact that they were paid to do so. A rising trend promoting critical thinking and doing your own research is also gaining relevance among Gen Zs.

Amolik says that one of the most common triggers which leads to Gen Zs getting influenced are promises of money. “A lot of influencers came up during the lockdown era. We’ve seen a lot of people talking how much money you can make from the stock market and that is how people are being influenced.”

She adds: “As a Gen Z consumer of content on the Internet, it’s important to have the right information, and social media is one of the most accessible ways right now. We should be more cognisant about what is being said, whether it is relevant, and know the pros and cons before investing our money.”

To that extent, de-influencing can benefit Gen Z investors. Ritika Laddha, 25, who works at a consulting company in Kolkata, feels she does not have the time go through what influencers on social media say about investing and, thus, prefers to de-influence her investment decisions by going to professional investment advisors.

Says Ritika: “My friends or colleagues talk about what they have invested in or want to invest in. They also advocate where you can invest—for example in this mutual fund or in this stock and it will give you X per cent return on the basis of what they have seen on the social media. While I do listen to them, my personal belief is that I don’t have time to do the research, so I consult an investment advisor to do that for me.”

Money Dysmorphia: While de-influencing is the right way to go ahead when it comes to making financial decisions, money dysmorphia can put you on a dangerous path, which many Gen Zs are taking.

Money dysmorphia as a phenomenon, is an offshoot of the mental illness, body dysmorphia disorder (BDD), in which a person excessively and obsessively worries about flaws in their appearance.

Often this feeling of deep dissatisfaction extends to finances as well, which ultimately led Gen Zs to coin the term money dysmorphia.

The show-off culture sparked by the ability to share every moment of your life on the Internet has contributed to this unhealthy trend.

Extended to the world of investments, this phenomenon leads to people having a distorted perception of their financial situation due to comparisons with their peers and the world they see on social media. This in turn leads to irrational decision-making.

Says Amolik: “I don’t think money dysphoria is the kind of a term that has caught up a lot in India; it’s still picking up. People first need to realise that this is an actual thing wherein comparing ourselves with others can lead to dissatisfaction.”

She explains how it manifests itself. “I think we are constantly bombarded with happy posts and success stories. I did this, and I did that and people get influenced by it and feel that they are probably lagging behind in terms of the worldly things out there. Maybe you’re not going to expensive places or maybe you’re not travelling enough, and at some point we all feel that way, and it is a very real issue.”

Sahej cites his own case to explain how money dysmorphia occurs. “When you are earning, there’s a disposable income. Questions like ‘What am I earning for?’, ‘What is it going to enable?’ arise. And you end up comparing what others are doing with their disposable income. When that happens, you’re bound to worry about how much you’re making. For me, it’s like every time I watch some video or something, I get an exposure to how much someone else is making,” he says.

Some of the more serious ways in which this trend manifests itself includes a constant fear of losing money, which in turn leads to avoiding investments altogether or engaging in extremely risky investments to chase a dopamine rush from making quick bucks.

So, how can Gen Zs deal with feelings of inadequacy which ultimately result in money dysmorphia?

Amolik says that setting realistic financial goals for your investments is a key part to countering such inadequacies. She also mentions that consciously reminding one’s own self that whatever you see on the social media may not be necessarily true is another key step in dealing with money dysmorphia.

She adds: “Everyone’s financial journey can look different, and accepting that is the first step towards setting realistic financial goals. Another important aspect is to promote conscious living, reminding yourself that what you see out there might not necessarily be the entire truth. Maybe some of those are sponsored posts, maybe some of the things they show on the social media are borrowed or rented.”

Press the unfollow button when such feelings become overwhelming and take frequent breaks from the social media, she advises.

Quite clearly, not all the Gen Z trends we have explored here (the list is definitely not exhaustive) are negative.

While some can help inculcate a savings habit, others can lead you to the right path, yet there are others that can spell doom for your finances. The key is to be aware of what these trends entail and navigate them consciously and carefully.

ayush.khar@outlookindia.com