Gen Z India: 70% Spending on Essentials, Not Just Fun

If you’re Gen Z in India and just started earning, you might think everyone expects you to splurge on experiences. But a new study shows your peers are actually very practical with their money, with over 70% of monthly spending going towards essential living expenses and recurring commitments.

A SalarySe study, analyzing millions of UPI transactions from 5.2 lakh salaried Gen Z users, found this generation is focused on daily necessities. This challenges the common idea that young earners prioritize only lifestyle choices and travel.

Your Essential Spending Breakdown

Here’s how most of your peers’ monthly spending is allocated, according to the study:

• Bill payments and subscriptions: 20.1%
• Groceries: 15.7%
• Financial services: 12.2%
• Shopping: 11.9%
• Food: 11.5%

Together, these top five categories account for more than 70% of monthly spending. Travel, surprisingly, makes up only 5% of their budget.

Digital Habits and Daily Responsibilities

The study highlights how deeply digital payments are woven into young professionals’ financial lives. Piyush Bagaria, Co-founder of SalarySe, noted that India’s Gen Z is the first generation to manage nearly all financial aspects digitally.

This means everyday responsibilities, digital payments, and lifestyle choices coexist seamlessly for you. The sheer scale of UPI has fundamentally reshaped how young professionals manage their money and spending decisions.

Entertainment Subscriptions: Part of a Wider Picture

While you might have multiple streaming services, entertainment subscriptions don’t dominate overall Gen Z spending. They are just one part of a broader recurring-payment ecosystem, which includes utilities and financial services.

• JioHotstar: 12.4%
• Netflix: 10.7%
• Spotify: 5.6%

The study clarifies that focusing solely on entertainment can obscure the larger portion of spending dedicated to daily necessities.

Spending Shifts as You Grow

Interestingly, the study also compared spending between two Gen Z age groups, 18-23 and 24-29. Discretionary spending remained consistent at 32% for both groups, showing a steady desire for non-essentials.

However, the share of money dedicated to essentials increased from 50% for those aged 18-23 to 59% among those aged 24-29. This suggests your spending priorities naturally shift towards more essential expenses as you gain more financial responsibilities.

So, if you’re feeling the pinch of adulting, know you’re not alone. Your peers are navigating similar financial paths, balancing everyday needs with digital convenience.