73% of Gen Z Identify as ‘Reactors’ in New Study

A shift is underway in how consumers in the United States manage their finances, and high earners are increasingly exhibiting reactive money habits.

The PYMNTS Intelligence report “The Financial Management Divide: Planners vs. Reactors” surveyed 2,878 U.S. consumers between Jan. 8 and Jan. 20 to examine distinct financial management behaviors. The report identified two primary personal finance styles. Planners take a strategic, proactive approach to managing their cash flow, often avoiding reliance on credit. Reactors, conversely, handle bills as they arise and frequently depend on credit. In January, 4 in 10 consumers were classified as planners, while the remaining 60% fell into the reactor category.

The report indicated that the balance between these groups is shifting, with economic pressures reshaping financial habits across different income levels. The share of planners has declined since February 2024, when roughly half of consumers were planners and half reactors. This variance over time suggests that a consumer’s financial management style may be linked to economic uncertainty or seasonal spending trends.

The rise in reactive behaviors, particularly among younger generations and high-income earners, signals that reactive responses to financial pressures are transcending traditional income boundaries. Understanding these behavioral distinctions is critical for financial institutions and wealth managers focused on developing planning habits and solutions supporting stability and growth.

Key findings from the report include:

Baby boomers were the only generation where planners constituted a majority (54%). In contrast, 73% of Generation Z fell into the reactor category. This disparity suggests that financial habits may evolve with age and experience, and it reflects divergent priorities, with boomers prioritizing financial stability (22% cited retirement saving as their top goal) and Gen Z more likely to take financial risks like starting a business (7%).

There was a growing tendency toward reactive financial behaviors among high-income consumers. Since February 2024, the share of high-income planners has plunged 25%, with 52% now identified as reactors. This decline may indicate that even those with substantial earnings face new financial pressures from inflation and rising living costs, or that new spending and consumption patterns are affecting their finances.

Planners allocated a larger portion of their monthly budget — 12% — to savings and investments, more than double the 5.6% allocated by reactors. This highlights a long-term approach among planners, who prioritize building future financial security. Reactors were generally more focused on the present, with 30% prioritizing debt repayment, suggesting many are grappling with financial burdens that prevent wealth accumulation.

The report also detailed the specific criteria defining each persona, such as average credit card balances, savings levels and how emergency expenses would be covered.

While planners were comparatively unlikely to live paycheck to paycheck, some still did, potentially due to low income or unavoidable high expenses. Conversely, reactors comprised 92% of those who had difficulty paying monthly bills and 68% of those living paycheck to paycheck without difficulties.

The findings underscored the need for tailored solutions from financial institutions to support the distinct needs of each money-management persona.