Millennials were relentlessly ridiculed for their avocado toast consumption; for Gen Z, it’s $7 iced lattes.

The stereotypes that younger generations spend too much seem to follow a similar pattern: Perhaps, if it weren’t for their reckless spending, younger people would be able to afford mortgages and healthcare.

However, a new study is putting that notion to rest. British bank NatWest’s recently released Savings Index includes some revealing statistics about Gen Z financial habits. After surveying 10,000 people across the UK, the Index found that 69% of Gen Z respondents set themselves a budget—but only 42% of Baby Boomers.

“Younger generations were making more efforts to budget in 2023,” says Angela Connor, savings expert at NatWest. “Those who can are trying to save.”

Gen Z economics are getting tougher

Gen Z’s budgeting habits could be caused by the difficult economic conditions they have faced as they entered adulthood. Essential spending on items like vehicle insurance, rent, and food has gone up at rates significantly higher than that of wages. On top of that all, higher education costs have skyrocketed. In 2023, the average Gen Z borrower had an outstanding student loan debt of $24,473.

Alex King, accountant and founder of Generation Money, works with Gen Z savers first-hand. He believes that the rising cost of living has led more young people to budget responsibly.

“As a generation, there’s definitely a feeling that they have it worse in terms of economic opportunities compared to prior generations,” King says. “When I’m speaking to people in their early twenties, they think, ‘I’m never going to go up the property ladder, I’m never going to be able to afford my own apartment.’ So, they take budgeting much more seriously than previous generations.”

As for that pesky rumor that Gen Z spends with abandon, King chalks it up to generational backlash.

“I’ve seen millennials lay that criticism at Gen Z, almost as if they didn’t get it themselves,” King says. “I think it’s actually a much more unfair criticism of Gen Z than it was with millennials. […] They’ve had to go through COVID as well as the legacy of the financial crisis.”

Mark Beal, assistant professor of practice at Rutgers University School of Communication, thinks the labor market environment may also inform Gen Z saving outcomes. In the current era of overemployment, where workers balance multiple jobs or pursue side gigs, savings could be top of mind.

“As a 57-year-old Xer, I had one focus: My job for 30 years at the same company,” Beal says. “Gen Z may have a day job, but they’ve also got side hustles where they’re generating additional revenue that is contributing to this mindset of earning money, saving money, investing money, and, of course, spending money as well.”

Social media has improved budgeting habits

It’s easy to label social media as a spending accelerant. TikTok and Instagram have built-in shopping functions. And popular sites like Pinterest exist almost entirely to stare at products. Influencers tout brand deals and coupon codes in ways that old-school celebrities never could.

However, some experts believe that social media may actually be making Gen Z more cost-conscious. A new crop of “finfluencers” promote the importance of salary transparency and investing from a young age. Trending terms like “loud budgeting” constantly make the rounds of the For You Page on TikTok. In fact, the NatWest study found that 74% of Gen Z respondents participated in a social media challenge to boost their savings.

“They’re not buying into every influencer that’s sharing content about saving and investing, but they’re consuming a lot of that content, which I think is influencing the mindset of a saver,” Beal says. “No other generation has had that.”

King echoes the importance of these online budgeting challenges, whether it be from a big-name TikTok and Instagram influencers to the basics of expenditure tracking apps.

“A lot of [financial apps] seek to automate these finance challenges and savings plans,” King says. “You see lots of apps that have roundup spending features. It’s primarily Gen Z who take advantage of that.”

With the help of tools like these and in the face of challenges of the current economic climate, Gen Z is budgeting at record rates. So no, most of Gen Z is not just wastefully shelling out big bucks for iced coffees. And if they are, very well be budgeting for it.