MONEY AND GENERATIONS: FINANCIAL CHOICES MADE BY GEN X AND GEN Y

When it comes to financial choices and investment behavior, Generational differences have always been important subjects of research. The leading two generations influencing the market the most today, are Generation X and Generation Y. These two generations are distinctly different in several behaviors (Pesquera, 2005). There are several studies that have focused on understanding the different characteristics of Generation X and Generation Y such as shopping behaviors, workplace behaviors and lifestyle (Bakewell & Mitchell, 2003); (Martin & Turley, 2004); (Bush, Martin, & Bush, 2004). There is not much research done on understanding how these generations manage their money. Thus this study aims at developing a broader understanding of how these generations make their financial choices. Findings reveal that there is a significant difference in the ways Gen X and Gen Y spends their money, make investments and do payments. Also, both the generations have very dissimilar financial goals, thus the policymakers and marketers should cater to these two groups differently.