NEW YORK — Members of Generation Z are saving more of their income than many older Americans and using digital tools to manage spending, challenging the perception that younger consumers are financially reckless, according to new research.
Noting that popular commentary often portrays Gen Z as a cohort driven by impulse purchases and social media trends, PYMNTS Intelligence cited data by, along with research from the Federal Reserve, that suggests younger Americans are neither uniquely irresponsible nor significantly worse off financially than earlier generations.
Surveys indicate that Millennials and Gen Z adults are nearly as likely as older cohorts to say they are financially better off than their parents were at the same age, according to the PYMNTS Intelligence analysis.
The research also found that Gen Z saves a slightly larger share of its income than other demographic groups, according to PYMNTS.
A Growing Role
At the same time, PYMNTS said younger consumers are playing a growing role in sustaining retail and financial services activity.
PYMNTS Intelligence further noted that spending by Millennials and Gen Z has been cited in corporate earnings calls and retail performance reports as a key driver of revenue growth across commerce and financial services sectors.
Executives often describe the cohort’s purchasing behavior as “digital by default,” with shopping, payments and savings increasingly managed through mobile apps that combine banking, budgeting and commerce in a single digital workflow.
Despite that emphasis on mobile tools, the data shows younger consumers are not exclusively online shoppers.
62% of Purchases in Store
According to PYMNTS Intelligence, consumers between the ages of 18 and 24 purchased about 62% of their merchandise in physical stores last year — a larger share than older shoppers.
Retail executives cited in PYMNTS reporting say Gen Z shoppers move fluidly between mobile apps, online marketplaces and brick-and-mortar stores, often influenced by social media and peer recommendations.
This hybrid approach to commerce is supporting transaction growth across both digital and physical retail channels, the report said.
Installments used as budgeting tools
The same pattern appears in payment choices, according to PYMNTS Intelligence.
Using ‘Tools’
Buy now, pay later (BNPL) and installment payments are often viewed as encouraging irresponsible borrowing. However, PYMNTS Intelligence said available data suggests many younger consumers use those options as tools for managing their finances.
Among Gen Z consumers who use BNPL services, 55% cite speed and convenience as a key factor, while 43.7% say they use installment payments to help optimize their credit profile, according to PYMNTS Intelligence.
The research also shows rising use of installment options on credit cards and store cards among younger shoppers.
Those payment structures provide predictable repayment schedules that can simplify monthly budgeting, PYMNTS Intelligence said, suggesting installment payments often function as a form of financial planning rather than a driver of impulsive spending.
