Saving has been a tough decision for most, more so for the current generation. The members of Gen Z and late millennials are now the youngest employees in the workforce. As they venture into their professional careers, many are failing to prioritise on a key aspect of their finance– savings and investment.
According to a report by Deloitte, millennials and Gen Z save less than what they spend on their lifestyle and this is less than 10 per cent of their income.
This generation spends most on monthly essentials followed by education and utilities. Any additional income is spent towards dining out and entertainment, apparel and accessories, electronics, travel and so on - basically experiences. Out of the total income including incremental income, saving holds only 10 per cent share in it. This indicates a shift towards a consumption economy rather than a savings economy, which was a predominant feature of the preceding demographic cohort.
Warren Buffet’s golden advice on wealth management is ‘Do not save what is left after spending but spend what is left after saving.’ But it appears that this generation has a different philosophy to follow.
The young members of the workforce differ from their previous generations, Gen X or Baby Boomers as they are preferably called, by their lifestyle choices, expenditure pattern, a significant need for convenience, and brand preferences. Saving for retirement, buying homes and other traditional markers of achievement are no longer desired. Most of them have adopted the “You Live Only Once (YOLO)” ethos, enjoying life to the fullest, at the cost of their savings. Truth be told, many of them have no track of their spending, and have even less than ₹1,000 in their savings account.
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