Saving Behavior and Financial Decision-Making of Young Generations in an Uncertain Economic Environment

Abstract

     This academic article aims to analyze the factors influencing saving decision-making among young generations under conditions of economic uncertainty.    The study defines “young generations” as Generation Z (born 1997–2012) and Millennials (born 1981–1996). It employs a literature review and theoretical synthesis based on key frameworks in saving economics and behavioral economics, including the Life-Cycle Hypothesis, the Permanent Income Hypothesis, and the concept of precautionary saving, along with empirical evidence from international studies. The findings indicate that young individuals are increasingly aware of the importance of saving in response to economic uncertainty. However, their saving capacity is constrained by structural factors such as high living costs, debt burdens, and income instability in the labor market. Moreover, a paradox in saving behavior is identified, characterized by the coexistence of “soft saving,” which prioritizes present well-being, and “revenge saving,” which reflects intensive saving driven by economic anxiety. These contrasting behaviors highlight disparities in economic status and the influence of behavioral biases.   The study concludes that saving decisions among young generations are shaped by the interaction of economic, behavioral, and social factors. It proposes policy recommendations, including enhancing financial literacy, developing flexible saving tools, and implementing supportive government measures to strengthen sustainable saving capacity. The synthesis further reveals that the most influential factors in saving decisions are income uncertainty and high living costs, while the most significant barriers are debt burdens and insufficient income.