COMPARATIVE STUDY OF GENERATIONAL DIFFERENCES IN FINANCIAL DECISION MAKING: A STUDY OF MONEY MANAGEMENT ATTITUDES AND PRACTICES

Abstract

Financial choices vary significantly across different generations due to a range of factors, including economic conditions, social norms, cultural influences, and access to technology. This study explores these generational differences by focusing on how Baby Boomers, Generation X, Millennials, and Generation Z manage their finances. Through thorough analysis, we aim to identify both the unique and shared aspects of financial decision-making among these age groups. Additionally, the research delves into the underlying factors that shape financial behaviors within each generation, providing valuable insights for financial institutions, educators, and financial advisors. This study employs a quantitative research method by utilizing a standardized survey questionnaire to collect data on the financial practices and attitudes of participants. The participants are divided into four generational cohorts: Baby Boomers (born 1946-1964), Generation X (born 1965-1980), Millennials (born 1981-1996), and Generation Z (born 1997-2012). The standardized survey was distributed to a representative sample from each generational cohort, addressing topics such as financial attitudes, habits, and practices. The analysis revealed distinct differences in financial attitudes across generations. 

Baby Boomers demonstrated a conservative approach, prioritizing savings and avoiding risk. In contrast, Generation X showed moderate risk tolerance, maintaining a balanced approach to saving and spending. Millennials exhibited a more progressive attitude, displaying higher risk tolerance and focusing on investments. Generation Z, on the other hand, showed a cautious yet optimistic outlook, valuing financial security and utilizing digital financial tools.

In terms of financial habits, Baby Boomers preferred traditional saving methods and were less inclined to incur debt. Generation X found a balance between saving and spending, approaching debt with caution. Millennials were more likely to invest in stocks and use digital banking, although they often carried higher levels of debt. Generation Z demonstrated an early adoption of digital finance tools and took a proactive approach to saving and investing. Each generation's financial attitudes and behaviors are shaped by its unique economic, social, and cultural context. Baby Boomers were raised during a postwar economic boom, which influenced their conservative financial practices. In contrast, Generation X faced economic uncertainty, leading them to adopt a more balanced financial strategy. Millennials grew up during the digital revolution and integrated technology into their financial habits. Generation Z, raised in an interconnected digital society, quickly became early adopters of digital financial tools. Technological advancements have profoundly impacted financial decision-making. While Baby Boomers are generally less engaged with digital finance, they are gradually embracing new technologies. Generation X displays versatility, blending traditional and modern financial approaches.