Gen Z Savings Rise Despite Paycheck Strain

Most consumers in the United States live paycheck to paycheck, but young generations are finding ways to hold on to more of what they earn.

PYMNTS Intelligence found that Generation Z consumers save more than one-third of their monthly income, eclipsing the saving habits of every other age group and signaling a disciplined, digitally-driven approach to money management with an eye on the future.

Financial services providers are increasingly designing offerings tailored to this youth-led saving momentum. The PYMNTS Intelligence report “Consumers Say They Want Budgeting Tools but Aren’t Using Them” revealed that 55% of Gen Z consumers use advanced budgeting apps compared to lower overall adoption, helping them reallocate funds from wasteful spending and report greater “financial comfort.”

“Gen Z experienced heavy emphasis on saving behaviors during their formative years (2008-2015) from parents shaped by the financial crisis and from access to apps and tools that replaced the piggy bank with learning the value of saving money,” according to PYMNTS Intelligence’s “The Gen Z Decoder Ring.”

Roughly 64% of Gen Z began their financial literacy journeys at an early age, compared to the overall sample of less than 53%, the report found.

The Apps and the Savings Tools

Meanwhile, banks and FinTechs are experimenting with gamified, real-time, integrated saving tools that meet Gen Z’s demand for instant, frictionless banking experiences. These tools transform the bank into an app that encourages saving by design. Such innovations are tapping into Gen Z’s willingness to save a relatively higher slice of their income, turning saving into a habit and an experience.

“The Gen Z Decoder Ring” found that Gen Z may confront economic headwinds, from heightened cost of living to precarious employment, but their saving behavior reflects a mature, digitally enabled resilience. Gen Z logs an average of 29 “digital activity days” per month on banking, outstripping the 23 days recorded for the overall population.

Gen Z consumers also save in different places compared to other generations. They spread their savings across cryptocurrencies (6.3% versus less than 1% for boomers), digital wallets (13% versus 1%) and traditional bank accounts (42%), the report revealed.

The push to keep more money on hand for, say, a rainy day proves that Gen Z consumers are not just frugal by necessity. They are building a new financial norm, where the default is to save, track and sustain financial wellness through tools that respond instantly to their lives.

For providers, Gen Z’s sophisticated, digitally native approach to saving represents a mandate and an opportunity. They must evolve or risk losing relevance to a generation that sees saving not as an obligation but as an empowered lifestyle.