Transition in Gen Z, spending and financial patterns for Millennials attributable to Covid-19
Almost nothing was left unscathed by the coronavirus pandemic but some generations were affected harder than others. The influence has been significant for young people in their teens and early 20s-not just emotionally but also professionally.
The COVID-19 pandemic and the subsequent lockdowns have changed Indian youth’s finance and spending choices. Born as successive generations — Millennials from 1982 to 1996, and Gen Zers from 1997 to 2012-have several similarities in common. Both generations are identified generally as ‘India’s young people’ and both are strongly linked to technology and the internet.
Two-generational cohorts significantly vary, though. A recent Tata Capital study found several disparities between the two generations when it comes to financial, social, and technological behavior.
And this defining shift-the Millennial Pivot-which best can be described as a tipping point that defines how young people’s behavior and attitudes begin to change around the age of 25 has further been highlighted in the months since the start of the pandemic. With the beginning of COVID-19, millennials’ life — a generation associated with spending more and saving less — has turned head over heels.
The COVID-19 crisis has had a significant effect on the actions of each generation
The shutdown and uncertainty caused millennials to pause and evaluate their lifestyle and levels of spending. Professionals facing the threats of cutting wages and layoffs are learning to live with less income.
The study referred to 34% of the Gen Zers continuing to spend up to 15% on non-essentials while 31% of the millennials did the same. These trends may however see a change, with more than half of Millennials (52 percent) and 49 percent of Gen Zers now seeing an effect on their household income-more than any other generation.
The study revealed that banks are the first preference for borrowing money for 46 percent of Millennials compared to 30 percent of Gen Zers who consider family as their first choice. This provides a rare opportunity for banks and credit unions to reach out to those younger cohorts who are already looking to spend more.
The global crisis shifted the two generations’ way of thinking about money
It’s evident there’s a tipping point — a Millennial Pivot — which obviously marks the distinction between the two generations. And the financial actions made by the two-generational classes during the latest Coronavirus pandemic have only strengthened such a turning point of life.
(This article was originally published in Passionate in Finance.)