Gen Z is earning more than their parents ever did, yet they’re drowning in debt and struggling to save. What’s going wrong? From targeted ads to “buy now, pay later” schemes, we break down the four key reasons Gen Z’s bank accounts are empty—and how to fix it.
The Paradox: Higher Earnings, Lower Savings
On paper, Gen Z should be thriving. Entry-level salaries in tech and startups have jumped, and gig economy platforms like Swiggy, Zomato, and Urban Company offer flexible earning opportunities. Yet, a Reserve Bank of India (RBI) survey reveals that 75% of Indians under 30 lack emergency savings to cover even ₹10,000 in unexpected expenses. Why? Blame a collision of digital-age temptations and systemic hurdles—from UPI-fueled impulse buys to relentless “₹499/month” EMIs for gadgets they don’t need.
1. The Digital Trap: Ads That Know You Too Well
Remember billboards? Today’s ads are smarter, sneakier, and personalized. Tech giants use stimulus-response theory—a tactic rooted in behavioral psychology—to keep you clicking.
- Influencer Culture: Platforms like Instagram and TikTok turn creators into “cool kids” selling lifestyles. A BCG study found 70% of Gen Z uses influencers as “search engines” for trends.
- Micro-Targeting: Algorithms track your habits, testing which ads trigger purchases. You’re not just a consumer—you’re a lab rat.
2. The “Buy Now, Pay Later” Illusion
UPI and BNPL (Buy Now, Pay Later) apps make spending effortless. But convenience comes at a cost:
- Instant Gratification: A coffee here, a gadget there—small purchases add up.
- Debt Spiral: Per Forbes, 40% of Gen Z borrowers have unsustainable debt levels, often from BNPL plans.
“It’s like digital khaata—except no Raju Bhaiya stops you at ₹500,” says financial advisor Sharan Kapoor.
3. Lifestyle Inflation: The Silent Budget Killer
Official inflation in India is 6%, but Gen Z’s real inflation is higher. Why? Lifestyle upgrades:
| Parent’s Budget | Gen Z’s Budget |
|---|---|
| Groceries, utilities | Netflix, Zomato, trendy cafes |
| Saving for 1 big purchase | 5 EMIs for gadgets, clothes |
Upgrading your life isn’t wrong—but without boundaries, it’s financial suicide.
4. The Abundance Paradox: Too Many Choices
Gen Z has endless options—careers, gadgets, experiences—but decision fatigue leads to overspending. A Harvard Business Review study links choice overload to impulsive buys and regret.
How Gen Z Can Fight Back
- Delete Temptation: Unfollow influencers, mute ads.
- Embrace “Old-School” Budgeting: Use cash.
- Question Every Purchase: “Do I need this, or did an ad tell me to want it?”
Final Word: Rewrite the Formula
Gen Z’s financial struggles aren’t inevitable. By recognizing traps—from BNPL, Credit Cards to lifestyle inflation—they can reclaim control. “Small choices shape big futures.”
Also Read: 7 Essential Financial Goals for Your 20s
