Is Gen Z Saving More Than Millennials—Here’s What They’re Doing Right

You remember when every adult said that young people were terrible with money? It would appear Gen Z never received that memo. As millennials were getting roasted for their avocado toast obsession, Gen Z has been busy racking up cash.

Here’s the thing that has everyone buzzing: this generation is beginning to save money much earlier than the rest of us ever did. And honestly? Their approach is pretty smart. Here’s what they’re doing differently, and how we can steal some of their heavyweights’ best moves.

The Numbers Don’t Lie: Gen Z vs Millennials BY DAN SCHAWBEL Myth: One day Millennials will occupy most management positions.  Fact: There’s a new generation moving into the workplace that has four different attitudes when it comes to work, finances and money, communication and diversity.  When businesses look at Millennials and assume that they will one day be the majority in leadership roles they are greatly mistaken.

All right, so here’s where it gets interesting. According to recent research, Gen Z is getting on board with the savings game at around age 20, whereas millennials didn’t start focusing on it in earnest until they were about 26. That’s a six-year head start!

And here’s a bonus: 63% of Gen Z plan to save even more this year, versus 53% of millennials. Yes, it’s not a huge spread, but when you’re discussing building wealth, each percentage point counts.

How Gen Z Became So Stupid So Quickly

They lived through some rough stuff. Put it this way: They saw the 2008 financial crisis hit while they were still in their formative years, followed by a pandemic just as they were stepping into the work force. That will focus anyone’s mind on financial security.

They’ve embraced “soft saving.” This is not your parents’ aggressive retirement planning. About 84 percent of Gen Z saves a portion of every paycheck, but just about 20 percent are laser-focused on retirement. They’re more about striking a balance between today’s needs and tomorrow’s security.

Technology is their secret weapon. While older generations were still balancing checkbooks, Gen Z came of age with budgeting apps, high-yield online savings accounts and tools that make saving almost automatic.

What Gen Z Is Doing Right

Good things come to those who start early. Most started saving themselves before the age of 21. Thanks to something called compound interest, those extra years at work can be worth hundreds of thousands of dollars — in seed money — when you actually do decide to retire.

They’re not fooling around with contribution rates. Close to 50% of Gen Z themselves saves 20% or more of their income. That’s actually amazing––and it’s made all the more so by the fact that many are making entry-level incomes.

They’re tech-savvy about everything. From high-yield savings accounts to budgeting apps to Buy Now, Pay Later systems, they turn technology to their advantage when it comes to their money.

They’re smart shoppers. Having their coupon game on point is not mortifying for them — it’s a strategic advantage. They compare shop, purchase from ethical brands and do not hesitate to raid thrift stores.

Emergency funds are a priority. Where their predecessors might have prioritized investing first, Gen Z is stacking that safety net before taking more significant risks.

Where Gen Z Should Still Be Careful

They are not financially savvy. Paradoxically, while being great savers, Gen Z actually does worse than millennials on financial literacy tests. It’s great to know how to save, but you need to understand money management, taxes and more complex financial products, too.

Debt is creeping up. Student loans, obviously, but they’re also in the red thanks to those Buy Now, Pay Later systems and their credit cards. It’s easy to lose sight of that when everything here feels so effortless.

They are raiding emergency funds too frequently.” Around one-third of Gen Z has broken into their emergency savings — and not just in case of actual emergencies. That defeats the whole purpose.

And retirement planning is back-burnered. Softhand saving is wonderful for peace of mind, but you can only turn a blind eye to the long game for so long. Save for retirement the sooner the better.

How to Borrow From Gen Z’s Playbook

Start today, even if it’s small. I’m totally serious; $25 a week adds up a lot faster than you might think. The secret is getting the habit.

Automate everything. Have automatic transfers set up to your savings so you don’t have to worry about it. First, pay yourself, then spend the rest.

Build that emergency fund. Strive for anywhere from 3 to 6 months worth of expenses. It’s not the most thrilling goal, but it’s the one everything else rests on.

Embrace the tools. There are a gazillion budgeting apps and high-yield savings accounts out there. Just be sure to know what you’re getting yourself into, particularly with Buy Now, Pay Later services.

Shop with intention. You don’t need to become a complete minimalist, but give some thought to your purchasing. Clip coupons, vet prices, purchase used when it is prudent to do so.

Keep learning. Enroll in online courses, read financial blogs, listen to podcasts. The better the information you have, the better the decisions you will make.

The Bottom Line

Gen Z is showing that you don’t have to choose between living for now and saving for the future. It’s because they’re saving consistently, starting early, and using technology to help make it easier. So they’ve got a few blind spots to address, but it’s a decent philosophy in general.

The rest of us can take a lesson from their playbook. It’s not about being perfect – it’s about being consistent and doing what you can with what you have.

Your Questions Answered

Q: Are Gen Z indeed better savers than millennials? A: In many ways, yes. They begin earlier (by age 20 vs. 26) and nearly 47% of early savers report socking away 20% or more of their income. That’s a pretty significant advantage.

Q: What apps and tools are essential in their daily lives? A: High-yield savings accounts, budgeting apps like Monarch Money, price comparison tools and, yes, Buy Now Pay Later services (though they have to be careful with those).

Q: What is this ‘soft saving’ I keep hearing about? A: It’s about balance. Rather than being overly aggressive savers, who stash every penny away for retirement, they save regularly and also enjoy a nice life today. For many people, it’s a more sustainable method.

Q: How can I become better at saving? A: Begin today; automate your savings, and focus on developing your emergency fund first; use technology to your advantage; and continue to educate yourself about money. %The main thing is a little practice, not perfection.

Sources:

Transamerica Center for Retirement Studies 2025 Report on Early Savers

Marist Poll & Bankrate Emergency savings data

TIAA Institute & GFLEC financial literacy research

Internal: 

• • How to Start an Emergency Fund in 30 Days  (PersonalOne.org/emergency-fund)

• • Top Budgeting Tools  (PersonalOne.org/budgeting-tools)

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