The coronavirus pandemic has millennials and Gen Z tightening their wallets, and it's because they still feel crippled by the Great Recession

• Coronavirus is impacting millennials' purchase decisions more so than any other generation, according to a First Insight survey.
• Both millennials and Gen Z are cutting back on spending as coronavirus sparks recession fears.
• It's a natural response from two generations who watched the Great Recession unfold, which has made them more practical with money.
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Younger generations are tightening their wallets in the face of coronavirus.

The World Health Organization officially declared coronavirus a pandemic on Wednesday. But the virus is providing more than a health scare - it's also creating a financial one.

While those of all generations are concerned about the financial effects of the coronavirus, "millennials' behavior is changing more dramatically than any other generation," Greg Petro, CEO of retail analytics company First Insight, told CNBC's Lauren Thomas. "They are going to cut their spending."

More than half (54%) of millennials said coronavirus has impacted their purchase decisions - more than any other generation, according to a First Insight survey published on February 28. But while 40% of millennials said they're cutting back on spending in preparation for coronavirus, even more of Gen Z - 41% - said the same. That's compared to 36% of Gen X and 23% of baby boomers.

Younger people seem more concerned than older people about coronavirus' impact on their financial health, and it's all because of how they've been affected by major national events.

Millennials and Gen Z are being practical amidst coronavirus and recession fears

Thomas noted that the First Insight poll occurred as stocks took their worst tumble since the 2008 financial crisis. The Dow plunged again on Monday, by as much as 8% - it's biggest intraday drop since 2010. It's since rebounded, but the volatility of the stock market has been enough to spark recession fears.

It's enough of a warning for millennials, who are financially behind due to the Great Recession. Older millennials, who bore the brunt of the financial crisis, are still recovering from the recession and trying to play catch up on wealth building. Younger millennials, who entered the recovery period, became more risk-averse by watching the recession unfold.

The recession has also given Gen Z a practical view of money. The oldest were just 11 when the recession hit. They grew up observing its long-term effects on millennials, which caused them to become mindful of financial issues.

Their financial habits are also shaped by 9/11, the defining event dividing millennials and Gen Z, according to Jason Dorsey, a consultant, researcher of millennials, and president of the Center for Generational Kinetics. He previously told Business Insider that the aftermath of 9/11 showed Gen Z the uncertainty and fragility of the world.

Given their experiences dealing with varying national crises, millennials' and Gen Z's decision to cut back on spending amidst the coronavirus pandemic and recession fears only seems like a natural response.