From Baby Boomers to Generation Z: Money management tips across the generations

By MAS Team

The oldest Baby Boomer in the flower-power generation bracket is 72, while the youngest members of Generation Z are just four years old. The money habits and priorities between these generations are very different.

So what generation are you in and what should you be focusing on? Each generation will have different priorities and money habits – from savvy retirement savings for Baby Boomers to smart and steady elimination of that Millennial student loan debt.

Baby Boomers

Aged 54 - 74

Children of the Silent Generation, Baby Boomers are now in what’s known as the gravy years of life. Children are grown up and have probably left home, work is winding down, and retirement plans are close to fruition or already in full swing.

Mortgage freedom

Younger Baby Boomers should ideally be living a mortgage-free life or be well on their way to one. Focus on ramping up repayments and getting rid of any remaining debt so you can forget about the past and focus on the future.

Forecast ahead

For the younger end of the generation, it’s crucial to think about at what age you might want to retire, then work out your savings and retirement plan with that age in mind. It’s good to have something concrete to work towards.

Self-employed preparation

You may own your own business and plan to use the money from selling the company to fund your retirement. But make sure you prepare appropriately to make it a sellable asset. Prepare your exit well in advance and create a solid succession plan.

Two people sitting on a hill watching the sunset

Generation X

Aged 38 - 54

Generation X is a busy group that splits their time between caring for their children and their elderly parents and senior-level careers. They are otherwise known as the sandwich generation.

Repay that mortgage

Focusing on repaying your mortgage should be at the top of the list for this generation, leaving room for saving for the future. Younger Generation Xers shouldn’t be worrying about that final payment though. The idea is to put a portion of any salary rises or extra money towards higher repayments instead of lavish holidays.

Emergency funds

A top tip for this generation is having an emergency fund separate from everyday savings. This should be tucked away and should ideally hold around three months of household outgoings. If redundancy hits, for example, you’ll be in a comfortable position during the job search.

Be aggressive

Make sure you aren’t too conservative with your investing as retirement is still a relatively long time away. Maximise investment growth opportunities by ensuring your particular KiwiSaver fund is working hard for you. Speak to your MAS adviser about the best possible fund for your situation.

Protect that income

Look into income protection insurance, which will replace a portion of your income if you’re unable to work because of illness or injury. This means you’ll still be able to meet your financial commitments and keep striving towards that savings goal.

man and woman sitting side by side looking at documents


Aged 24 - 38

More than one million Kiwis are Millennials, making it the biggest generational group by far. Born in the 1980s and early 90s, Millennials have never known a time without technology, and they’re used to immediacy and opportunity. But it’s also the group hardest hit by student loans and debt.

Student loan

In New Zealand, student loan debts don’t accrue interest, so there’s no real advantage to paying it off fast. That said, how great would it be to get back a chunk of your salary each fortnight after paying off your student loan? Treat this like any other debt and pay off as much of it as is feasible, not just the bare minimum.

Home sweet home

Most Millennials, particularly those on the younger side, will be working towards (or at least thinking about) making their big first home purchase. Be sure to maximise your KiwiSaver entitlements. After being in KiwiSaver for three years, you can withdraw almost all of your balance for your deposit.

Save the salary

You will probably have a regular income at this stage of your life, which gives you some structure to work with for budgeting and saving. By knowing what your monthly incomings are, you can use this certainty to build up some savings separate to your KiwiSaver contributions. It’s always good to have a safety blanket for unexpected expenses or to treat yourself on a rainy day. Don’t forget to consider income protection insurance too.

Happy young couple unpacking boxes and moving into a new home

Generation Z

Aged 4 - 24

A generation born into a more diverse and accepting world, members of Generation Z are told they can be anyone and do anything. Influenced by their Gen X parents, these young Generation Zers have a world of opportunity to look forward to. They also must face the steep price of inflation and big student loan debts.

Don't be tempted

When you turn 18, it can be tempting to rush off and sign up for your first credit card. The shopping possibilities feel endless. But it’s essential to resist this temptation as it could result in some hefty debts that follow you for the next 10 years or more.

A helping hand

Grandparents and parents could open KiwiSaver accounts for the younger members of Generation Z so they have something to start with when they’re older and begin to work themselves.

Saving routine

The older members of this generation might be working their first job and may not be used to saving just yet. Use this time to learn what kind of saver you are and work on trying to start saving, even in small amounts, into a regular habit when you get paid.

Group of young people sitting in a cafe laughing

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