When it comes to spending and saving money, everyone has a different approach, and it seems your stage in life can have a huge impact on how you approach your finances. This has been confirmed in a new study by Virgin Media O2 that shows there are huge differences in the way different generations save and spend money. Here is the lowdown.
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How do different generations approach saving and spending money?
According to Virgin Media O2, the way millennials, Generation Z, and baby boomers approach their finances is markedly different. The study found that some of the top ways that millennials and Generation Z are saving money include:
- Having cheap nights in instead of going out
- Shopping for second-hand items
- Using money-saving apps
On the other hand, baby boomers are more likely than younger consumers to splash their cash on holidays, expensive meals out and gig tickets.
The study involving 2,000 participants found that people born between 1980 and 1995 (millennials) spend less on outings with family and friends (only £27.55 per month) than baby boomers, who prefer to spend their money on seeing others.
Generation Z was discovered to be the most prone to overspending in order to save time by buying whatever is most convenient rather than shopping around first.
Millennials aged between 35 and 44 are the most likely to spend money on things that they deem unnecessary.
However, if the under-24s get a pay rise, they are the age group most likely to splurge the additional money on items like new clothes or going out with family and friends. That said, the UK’s youngest adults are also the most inclined to be frugal with their money, with 75% of under-34s unwilling to spend when it is not necessary.
Additionally, the study shows that younger Brits are relatively savvy when it comes to leveraging tech to save money. An impressive 28% regularly use discount or reward apps.
What other ways are Brits saving money?
According to the research by Virgin Media O2, other ways that Brits of all generations try to save money include:
- Reducing food waste
- Using less energy at home
- Planning weekly food shops in advance
- Repairing broken items instead of replacing them
- Purchasing items in bulk whenever possible
What motivates consumers to save money?
From the study, it emerged that the biggest motivation for saving money was to save for a rainy day.
Other top reasons include:
- Having an emergency fund
- Saving for a holiday
- Building a future nest egg
- Saving for a car
- Saving for a big-ticket item for the home
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What can different generations learn from each other?
Clearly, different generations approach saving and spending money differently, but they can all learn a thing or two from each other.
For example, Generation Z, who are most guilty of spending over the odds to save time, can learn to be more intentional when spending by making a habit of shopping around first.
Research consistently shows that shopping around and comparing quotes on products and utilities such as electricity, gas and car insurance can save consumers hundreds of pounds each year.
It is also never too late for older generations to begin leveraging technology in the same way that younger generations do to better manage and save money.
Aside from rewards and discount apps, which younger Brits are already using, there are also budgeting apps that can help consumers of all ages keep track of where their money is going.
Ultimately, the most crucial thing when it comes to saving money is to know exactly why you’re doing it and have specific goals in mind.
For example, simply stating, “I want to save for a house deposit” is not enough. Instead, you should clearly map out how much you need, by when and how much you’ll need to save each month to reach the goal. It is much easier to stick to your long-term savings plan when you know precisely what your goals are.
