Sakchi Jain: Lifestyle Is Gen Z’s SIP Competitor as Credit Culture Grows

Easy Credit Puts Gen Z’s Investing Habits to the Test

For young consumers, the challenge may be making room for long-term investing while credit makes lifestyle spending feel effortless.

Credit can become a young consumer’s first financial habit

At the Business Standard BFSI Insight Summit 2026, Jain said credit is the first financial product encountered by 41% of Gen Z. She pointed to BNPL services and credit cards, whose convenience can make borrowing feel less consequential than a conventional loan application.

That change matters because the first product a consumer uses can shape everyday money habits. If credit is used to bring forward purchases, repayments may compete with the money available for saving and investing. The concern is not that every young borrower is overextended, but that frictionless access can make it harder to pause and consider the longer-term cost of a purchase.

Lifestyle spending may crowd out SIP contributions

Jain described a version of the “lipstick effect”: when larger aspirations feel out of reach, consumers may turn to smaller indulgences, such as sneakers costing ₹8,000. BNPL can make such purchases easier to access, but the convenience does not remove the obligation to repay.

Her central warning is that lifestyle, rather than market performance alone, can compete with regular investing. If a borrower faces job loss or a medical emergency, Jain said, they may stop SIPs while trying to preserve existing spending patterns. That possibility highlights a practical risk for long-term wealth creation: an investment plan can be vulnerable if contributions are treated as optional while credit-backed expenses continue.

Jain also noted that some young consumers are trying to invest small amounts while using BNPL. Products promoted one at a time may encourage an individual decision—start an SIP or defer a payment—without prompting users to assess how borrowing, spending and investing fit together.

Market participation does not guarantee financial understanding

Jain cautioned against treating Gen Z as a single group. A 27-year-old who began investing around the Covid period may have experienced a market decline and recovery, while a 19-year-old may only just be starting a first SIP. Their exposure and experience can therefore differ considerably.

For investors, the distinction is important: opening an investment account or beginning a SIP is not the same as understanding the product or being prepared to continue investing through difficult circumstances. Jain’s comments point to the value of looking beyond individual product pitches and reviewing household cash flows as a whole—including repayment commitments and the ability to keep investing when plans are disrupted.

Daily SIPs may reduce the feeling of commitment

Jain cited daily SIPs as an example of how product design can influence participation. For some young investors, putting aside ₹50 a day may feel more manageable than committing ₹1,500 or ₹2,000 on a particular day of the month, even if the overall investment over time is comparable.

A smaller-feeling contribution may help address the initial psychological hurdle, but it does not resolve the broader budgeting question. The useful test is whether an investor can sustain contributions alongside essential expenses and debt repayments—not simply whether the payment is packaged as a small daily amount.

Key Highlights

• Jain said credit is the first financial product encountered by 41% of Gen Z.
• BNPL and credit cards can make borrowing feel less significant and ease lifestyle purchases.
• Jain sees lifestyle spending as a potential competitor to consistent SIP investing.
• She warned that some investors could stop SIPs during financial stress without reducing lifestyle expenses.
• Daily SIPs may feel more manageable, but investors still need to assess the full budget and repayment burden.

Investor Note: Young investors can consider whether credit repayments and discretionary spending leave enough room for sustainable investing; a small SIP is only useful as a long-term habit if it can be maintained through changing financial circumstances.