How the Next Generation Sees Money

How the Next Generation Sees Money

 

My kids get money all the time. Birthdays. Holidays. Chores. Grandparents who love slipping cash into cards. You would think they would be thrilled. Instead they treat cash like an inconvenience.

They prefer their money to be in their bank accounts or on Apple Cash. They don’t carry wallets and don’t want to handle bills or coins. They want everything to stay on their phones because that’s where their financial life already is.

This is not unique to them. It reflects a bigger shift in how the next generation experiences money.

 

The Rise of the Digital Wallet

 

About half of the world’s population now uses digital wallets. Younger adults are leading the trend. Adults under twenty-four make nearly half of their purchases using a phone. Across all age groups, mobile phones account for almost a quarter of all payments.

Cash usage is steadily decreasing. It accounts for only fourteen percent of all transactions and is most common among older adults or lower-income households. Many young people do not even consider a physical wallet necessary for daily use. Large numbers have not withdrawn cash from an ATM in weeks or months.

 

Money Feels Different

 

For many older adults, cash feels tangible. You can hold it and see it leave your hand. Younger people perceive money differently. Digital balances seem more concrete than paper bills. Cash feels loose and easy to part with because it exists outside the system where they track all their spending.

Digital payments have accelerated this shift. Apple Pay and other mobile payment options are now easy to use and broadly accepted. People trust these tools and view them as safer than carrying a physical wallet.

 

New Spending Habits

 

The long-standing belief was that people spent more with cards than with cash. Gen Z might be reversing that trend. Many spend cash more freely because it feels separate from the accounts they check every day.

Debit cards have become the safety net. Credit cards are used more deliberately for large purchases or rewards, then paid off quickly to avoid exceeding their available balance.

Buy now, pay later services are also growing rapidly. Small monthly payments are easier to justify than a single large expense. These tools boost spending for both big and small businesses. The risk is that a few small payments can add up to a long chain of obligations that linger for months.

 

When Cash Still Matters

 

Digital wallets work fine until they fail. Phones run out of power, networks lose connection, and card machines malfunction. When everything depends on digital systems, you have no backup.

Travel makes this clear. If a system goes offline, you might need cash to buy food, transportation, or small necessities. A digital wallet can’t solve everything.

 

What This Means for You

 

Watching my kids roll their eyes at twenty-dollar bills reminds me that our relationship with money is always evolving. Tools change. Habits change. Feelings change. Your financial plan must remain steady even as everything around it shifts.

Cash or digital wallets are not the important part. What matters is understanding how each one influences your behavior. When you know your habits, you can make choices that fit your goals and keep you in control of your financial life.

 

Sources

• Juniper Research
• Federal Reserve Payments Study 2025
• McKinsey Digital Payments Consumer Survey 2024
• Link Scheme UK Cash Access Report
• LendingTree Consumer Cash Study
• Stax Payments Industry Commentary
• Cash App Gen Z Spending Survey
• University of Notre Dame Consumer Payment Behavior Study 2023
• MIT Credit Card Spending Behavior Research 2021
• J.D. Power Buy Now Pay Later Report
• PayPal BNPL Consumer Insights