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How Millennial and Gen Z women are redefining their relationship with money

The financial picture for young women today is entirely different from what it was just a few decades ago. Here's how they are making different lifestyle choices and changing their approach to money.

5 min read

The stats are in, and they’re telling a clear story: From how we feel about money to whether or not we have children, life today looks very different from how it did just a couple of decades ago. Many Millennial and Gen Z women are experiencing a whole new set of financial opportunities and constraints. Not only is this affecting their lifestyle choices, but also the ideas these generations hold about wealth.

Here’s how Millennial and Gen Z women are redefining how they live, work, and think about money.

Gen Z and Millennial money – the status quo

After growing up in the shadow of the Great Recession, and with median wages significantly lower now than when they were in the ‘80s, Millennials and Gen Z individuals are struggling to reach the classic financial milestones that many Baby Boomers were once easily able to achieve. Some studies even indicate that Millennials are ten times poorer than Baby Boomers. So, it’s no surprise that worldwide, close to 50% of Millennials and Gen Z live paycheck to paycheck and 49% of Millennials and 48% of Gen Z think their salaries are insufficient to achieve their goals. 

The challenging economic environment many young people find themselves in has greatly impacted their lifestyle choices. Compared to older generations, marriage rates among Millennials have dropped by 39%, home ownership is close to 30% lower, the birth rate has decreased to nearly the lowest levels in a century, and 60% of childless Millennials say they don’t want children because it’s too expensive. This shift in lifestyle has had a knock-on effect on how Millennial and Gen Z women approach wealth more broadly. Whereas 41% of wealthy women from the Baby Boomer generation will pass their wealth on to their children, only 15% of wealthy Millennial women plan to do the same. 

Shifting definitions of wealth

As approaches to money have shifted, so have ideas of what it means to be wealthy. Compared to previous generations, Millennials are more likely to invest in experiences rather than possessions, and both Gen Z and Millennials tend to prioritize a healthy work-life balance over receiving a higher salary. Plus, both Millennials and Gen Z care deeply about social issues and corporate responsibility, broadening the definition of wealth to include richness beyond monetary value.

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Wealth among Millennial and Gen Z women: the picture is getting brighter

Thanks to the internet, Millennials and Gen Z have access to more information than ever. This means that financial literacy is also on the rise, with many Millennials and Gen Zs using online courses, podcasts, and social media sites to boost their financial knowledge. 

This is especially important for women — as historically, they’ve faced systemic barriers to achieving financial independence and attaining pay equality. The good news is that Millennial and Gen Z women seem to be more confident than women of any previous generation about their ability to fund their future needs. Better access to resources, more representation, shifting gender norms, and equal-pay policies have all helped younger generations of women reach levels of financial independence that might have not been available to women from previous generations.

Silver lining during the pandemic

Here’s a surprising side-effect of the Covid-19 pandemic: Easier access to financial information seems to have positively impacted the confidence of many young women. In 2020, 23% of women felt prepared to cover their future financial needs. By 2022, that figure had jumped to 36%, with Millennial and Gen Z women being the most confident. Plus, pre-pandemic, 56% of Millennial and Gen Z women said they felt confident in their ability to manage their finances but by 2022, that figure had jumped to 71%. It’s not completely clear what caused this trend, but it could be that facing an extreme crisis reinforced the need for many young women to gain control over their finances. After all, the more informed you are, the better able you are to safeguard yourself against future economic turbulence.

Millennial women are increasing their assets

This upward financial trend for Millennial women can also be observed when looking at asset ownership. Compared to previous generations, the number of Millennial women owning $5 million or more in assets has seen a 10% increase. And, 71% of Millennial and 67% of Gen Z women are investing outside of their pension funds, compared to 62% of Baby Boomer women. Thanks to increased access to financial resources, Millennials and Gen Zers appear to be more confident in their ability to retire than older generations.

Another major contributing factor to this increase in wealth is the rising number of Millennial women entrepreneurs and women-led businesses. Just 37% of wealthy Baby Boomer women generated their wealth through business — bearing in mind, women in previous generations faced many more barriers to entering the world of business. Meanwhile, this number jumps to 50% for Millennial women. A Microsoft report had similar results, finding that a huge 76% of Gen Z and Millennials aspire to ultimately be their own boss. 

Increasing prosperity — but for whom?

The picture is getting brighter, but it’s still not rosy for everyone. The steadily increasing upward mobility among Millennials isn’t happening equally. The wealth that older generations amassed will gradually be passed down to their Millennial children — as much as $68 trillion over the next 30 years. By 2030, Millennials are expected to be five times richer than they are today. However, that will only benefit the Millennials likely to receive an inheritance. With 77% of Millennials and 72% of Gen Zs believing that the rift between rich and poor is widening in their countries, an inheritance gap within the Millennial generation could further increase this imbalance. 

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