Earn big, spend bigger: Why Gen Z is choosing good time over home loan

KOCHI: A fat paycheck used to mean saving up for a rainy day, buying a plot of land, or locking money into a fixed deposit. But for today’s Gen Z professionals, the thrill isn't in watching a bank balance grow—it’s in living life to the fullest right now.

Armed with lucrative packages in IT, marketing, and management, the newest cohort of the workforce is showing a distinct lack of interest in traditional investments. Instead, their financial priorities revolve around premium flagship smartphones, high-end gadgets, and slick lifestyle upgrades, heavily fueled by credit cards and digital wallets.

The conventional dream of owning a home or investing in real estate has taken a backseat. For this generation, the logic is straightforward: when premium flats and houses are readily available for rent, why tie down hard-earned capital in illiquid property?

Missing piece: Financial literacy

Financial experts suggest that this care-free spending behaviour stems from a lack of structured financial education when these young professionals enter the workforce. While there is a positive trend of young earners buying health insurance, wealth-creation instruments like equities, mutual funds, and monthly systematic investment plans (SIPs) remain largely ignored.

This is an area where corporate India could step in. Experts believe that corporate Human Resource (HR) departments can play a vital role by introducing financial literacy and wealth-management workshops during onboarding. Helping young hires understand profitable investment avenues and future planning early on could significantly shift their financial mindsets.

What experts say

"The younger generation should ideally aim to set aside 20% to 30% of their income to secure their future. There are numerous reliable investment schemes available today that offer guaranteed returns, allowing them to build wealth without entirely sacrificing their current lifestyle." — Dinesh Nair, Director, Equirus Wealth Pvt Ltd.

"We are witnessing a noticeable surge in personal and vehicle loans among the younger demographic. It clearly reflects a growing preference for immediate gratification and lifestyle consumption over long-term saving habits." — T. Anto George, Chief Operating Officer, South Indian Bank.