Your Quick Guide To Gen Z’s Finance Terms

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Scrolling through social media, you’ve probably seen reels about investing, crypto jokes, or someone throwing around words like "diversify your portfolio". For Gen Z, money talk is everywhere - it’s exciting, sure, but let’s be honest, it can also feel a little overwhelming. With side hustles, gigs and all kinds of creative ways to earn, keeping track of it all is more important than ever. But what do these fancy terms really mean, and how do they fit into how Gen Z handles money? Let’s break it all down.

Soft savings

Soft savings refer to money you save in ways that are not part of a rigid financial plan. It’s the result of making smarter, cost-effective choices or avoiding unnecessary expenses without consciously labelling it as ’savings’. Unlike formal savings, soft savings feel more flexible and casual.

Example: Let’s say you usually order coffee from a café every day, but this week you decided to make coffee at home instead. You didn’t plan to save that money, but at the end of the week, you realise you’ve saved ₹500 without trying too hard. Similarly, finding a discounted movie ticket or carpooling with friends instead of using a cab contributes to soft savings.

Loud budgeting

Loud budgeting is the practice of openly sharing your budgeting methods, spending plans or financial goals. It’s the opposite of quietly managing your finances; instead, it’s about making budgeting a public or shared activity. This includes discussing finances with friends, sharing your budgeting strategies online to build a community and so on.

Example: You decide to divide your monthly income into specific categories like rent, groceries, fun money and savings. Instead of keeping this process private, you share your system with your friend group or create posts to show how you stick to your limits each month. For instance, you might write, “This month, I managed to save 20% of my income by cutting back on unnecessary subscriptions” and share tips for others to follow.

Doom spending

Doom spending refers to impulsive purchases made when you’re stressed, overwhelmed or feeling hopeless. It’s often tied to negative emotions and is done to seek temporary comfort or distraction. While it may make you feel better in the short term, it can lead to regret later, especially if the spending disrupts your financial stability.

Example: You’re feeling anxious after getting a big bill or missing out on an opportunity. To cope, you start spending impulsively on expensive gadgets, clothes or unnecessary subscriptions. These purchases weren’t planned. While they give you a quick high, you end up regretting it later. The money could have been used for something essential instead.

Cash stuffing

Cash stuffing is a physical budgeting method where you withdraw a set amount of money in cash and allocate it into envelopes or jars labelled with specific spending categories, like groceries, transportation and entertainment. It helps you stay disciplined because once the cash in an envelope runs out, you can’t spend more in that category.

Example: Suppose you withdraw ₹10,000 at the start of the month. You divide it into envelopes - ₹3,000 for groceries, ₹2,000 for travel, ₹1,000 for entertainment and ₹4,000 for savings. If your entertainment envelope is empty, you know you can’t spend any more on outings until the next month. This method makes it easier to track spending and avoid overspending.

Girl math

Girl math is a humorous term used to describe how people justify purchases in creative or illogical ways to make them seem more affordable. It’s a light-hearted take on the mental calculations we do to make spending feel less like a financial burden.

Example: Imagine you buy a dress on sale for ₹2,000 when its original price was ₹5,000. You might justify it by saying, “I saved ₹3,000, so it’s a win!” Or, if you pay for something in cash, you might think, “That doesn’t count as spending because it’s not on my card!” These justifications ease guilt about spending, even if they don’t align with sound financial logic.

Free money

Free money refers to opportunities where you receive financial benefits without putting in extra effort or spending additional money. These benefits might come from discounts, cashback, rewards or programs that help you grow your savings passively. It feels like you’re gaining money without actively earning it.

Example: You participate in a local cleanup drive and as a thank-you, you receive a small cash voucher to use at nearby shops. You didn’t expect to earn anything, but the voucher feels like free money for your effort. Another example is getting rewards for shopping at specific stores or receiving cashback on regular spending.

Final note

Understanding these quirky financial terms is more than just staying trendy - it’s about making sense of how money fits into Gen Z’s lifestyle. Whether it’s saving, sharing budget ideas or thinking differently about spending, every little step helps you make smarter money choices.

Looking for an easy way to start managing your money? Open a Kotak811 Zero Balance Digital Savings Account. It’s simple to use, has no balance rules and gives you everything you need to handle your finances smoothly. It’s a great way to get started!

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.