Summary of this article
This shift is not happening overnight. It is a slow but visible change. More young people are now aware of the long-term cost of EMIs and BNPL. They know that borrowing for perishable or depreciating items does not build wealth.
Gen Z is often portrayed as the generation driving India’s consumption boom—fuelled by EMIs and Buy Now, Pay Later schemes. But the narrative is not entirely one-sided. Alongside the big spenders, there is a growing segment of young earners who are cautious, financially aware, and shifting focus from instant gratification to long-term wealth creation.
According to financial experts, there are a lot of young people, mostly from the Gen Z community, who are actually very conscious of their money.
“Gen Z cannot be equated only with the EMI or BNPL (Buy Now, Pay Later) culture. Many are, in fact, prudent and financially savvy, and understand the difference between an EMI and an SIP,” says Santosh Joseph, CEO, Germinate Investor Services.
In an EMI (equated monthly instalment), you consume now and pay much higher later, whereas in an SIP (systematic investment plan), you invest now to earn much higher later.
This significant difference in understanding the value proposition of consuming perishable items, which are depreciating today, versus investing in assets that can appreciate greatly over a period of time is helping Gen Zs make the shift.
They are deciding not to go for high consumption and high depreciation items by debt, but rather to go for high growth assets which have the potential to compound over time.
When you buy now or pay later, or when you use EMI, you are the one paying the interest or paying the return. On the other hand, if you invest your money in an SIP, you are the one earning the returns or earning the benefit of the investment.
“I think this structural difference is key. When you do a BNPL or EMI, you are paying. When you do an SIP, you are earning. That conscious realization has made Gen Z shift from being just irrational consumers to being rational investors,” says Joseph.
Slow But Visible Change
It, therefore, may not be fair to think that all Gen Zs are very irrational with their money. “Yes, there is still a large part of Gen Z that is in for instant gratification and instant happiness derived from buying things on loan and EMIs, but there is a good segment of Gen Z that has understood the power of saving and managing their incomes,” he says.
This shift is not happening overnight. It is a slow but visible change. More young people are now aware of the long-term cost of EMIs and BNPL. They know that borrowing for perishable or depreciating items does not build wealth.
Instead, they are choosing investment routes that help them grow financially. The idea is simple. Spend smart and invest smarter. This realization is helping Gen Z take control of their financial future.
