May 19, 2022

Generational Differences in Managing Personal Finances


If you’re one of the famous Kenyans on Twitter aka KOT you know how crazy the banter can get. Gen Z has been known to deprive the older millennials of their much-valued sleep.

But even with this banter going on, have we ever sat down and thought about these different generations' mentality and attitudes towards money? Because as much as most kids learn their basic money habit from their parents, there are major differences between every generation on financial habits and how they approach financial situations. This affects the market which then affects you as a consumer. In today’s blog, we’ll dissect these differences.

Just like everything else, children’s perspectives about financial matters are also shaped by what’s happening in the world around them. This experience gives them a slightly different approach to spending, saving, and investing money.

Let’s start with the oldest working generations right now: the Baby Boomers (55 - 73) and Generation X (43 - 54). Most of our parents fall under this age bracket and we’re in awe that even as the economy became worse they still managed to pay for our school fees and take care of all our expenses. , But how did they manage to do that? What was their financial attitude like?

According to the Investopedia Financial Literacy Survey, baby boomers are known to be goal-oriented, resourceful, and independent.

Most baby boomers are known to be confident in their financial knowledge. Their go-to financial advice is to always start saving early. I mean how many of us have heard the line, “When I was your age, I already had a house or owned three pieces of land”? . They aren’t wrong though. Most baby boomers are afraid of debt, hence they saved up for their investments.

Next up is  the favorite generation of all generations, the Millennials (25 - 42). Millennials are known to trust their instincts or peers more when it comes to investment decisions compared to financial advisors.

Factors such as social responsibility and the environment have played a huge role in their financial decisions. Social media also influences their decisions on finances as they feel the need to conform to their peer's financial habits.

When it comes to spending habits, most millennials are characterized as conscious consumers. When millennials aren’t traveling, they enjoy their food and drinks. The standard millennial spends more on dining and shopping online in comparison to the previous generations. According to research, millennials have proven to be open-minded to crypto and digital banking. Millennials have a bright future ahead of them in terms of their finances as most have responsibilities. We’re cheering for you young millenial!

Lastly, the most judged of all generations, the Gen Z (8 - 24)! Don’t we all love to judge the Gen Z but lowkey wish we were as tech-savvy and lingo-savvy as them?

One thing about Gen Z is they have been known to develop characters of their employers because they care about their mental health and want to balance work with life.  Any signs of toxicity in the workplace and they bounce at their earliest convenience, which is why most ‘GenZers’ are freelancers according to a survey completed in 2020.

When it comes to their spending habits, GenZers are known as pragmatic savers. They are sensible and realistic with their finances, all thanks to the financial learning tips they come across on social media. They are heavily influenced by what they see on their timeline. They trust the internet more and are open-minded about digital investments and finances. Home food may not be high on their list but they try to save for the goals they have.

Pro Tip: If you’re reading this as a Millennial, Baby boomer, or Gen X, please offer some guidance from your experience to Gen Z. You can direct them to our blog or even share this article with them. They’ll learn a thing or two.

To sum it up, as much as different generations have their own approach to finance and money decisions, we need to understand that money doesn’t respect age; anybody can get it.

Regardless ofthe generation you belong to, you can always make the best of your finances. Whether you’re a Gen Z saving towards your financial freedom or a millennial saving towards your dream house, dream car, or that piece of land you’ve eyed, your needs are valid. All you need is a proper plan and an app to schedule your goals.

How about we start planning together on Koa?