Gen Z India: 70%+ Spending on Essentials, Not Luxuries

If you’re part of India’s Gen Z, you might be surprised to learn how much of your paycheck actually goes towards the essentials. A recent study by SalarySe, based on millions of UPI transactions, reveals that over 70% of salaried Gen Z’s monthly spending is dedicated to everyday living and financial obligations.

Where Your Money Really Goes

This finding challenges the common idea that your generation primarily focuses on experiences, subscriptions, and lifestyle choices. Instead, a significant portion of your income covers core financial commitments.

The largest categories of expenditure include bill payments and subscriptions, which account for 20.1% of spending. Groceries take up another 15.7% of your budget, ensuring your fridge stays stocked.

You also allocate 12.2% to financial services, 11.9% to shopping, and 11.5% to food. These five categories combined show where the majority of your earnings are directed each month.

Interestingly, travel, often associated with younger consumers and their desire for experiences, makes up only 5% of your total monthly spending.

The Digital-First Approach to Finances

The study highlights how deeply digital payments are integrated into your financial life. Utility bills, subscriptions, and other recurring payments are almost entirely managed through digital platforms.

Piyush Bagaria, Co-founder of SalarySe, noted that Gen Z in India represents the first generation to handle nearly all financial aspects digitally. This fosters more structured financial habits where daily responsibilities and lifestyle choices coexist smoothly.

Entertainment is Part of the Mix, Not the Whole Pie

While entertainment subscriptions are certainly part of your recurring digital payments, they don’t dominate your overall spending. For example, among observable entertainment subscriptions, JioHotstar accounts for 12.4%.

Netflix follows at 10.7%, and Spotify at 5.6%. This shows that entertainment is a component within your broader digital payment ecosystem, rather than being your primary expenditure.

Shifting Priorities as You Grow

The study also looked at spending differences between two Gen Z age groups: 18-23 and 24-29. Your discretionary spending remains consistent across both groups, holding steady at 32%.

However, essential spending increases as you mature, rising from 50% for the 18-23 age group to 59% for those aged 24-29. This suggests your financial priorities shift as responsibilities grow.

The findings present a more nuanced picture of your generation’s financial habits, where essential spending often takes precedence alongside discretionary consumption, challenging older stereotypes.