Changing priorities: the younger generation would rather reduce savings than give up hobbies
In a new consumer survey, analysts found that the consumer behavior of Generation Z (Zoomers) is changing. A large number of young consumers are rethinking their priorities and what they can and cannot live without. Credit Karma found that many "non-essential" items have become the new "necessities." WWD writes about this.
From April 7 to 9, Credit Karma, in collaboration with The Harris Poll, surveyed more than 2,000 people aged 18 and over in the United States. Respondents were asked how they planned to cope with the cost of living crisis, including how it would affect their spending.
74% of Zoomers said that if their financial situation continues to deteriorate, they would "seriously consider" cutting back on "non-essential" purchases. This sentiment is also shared by Millennials (82%), Gen X (86%), and Baby Boomers (87%).
Despite this, a majority of Millennials (84%) and Zoomers (87%) believe that some non-essential spending has become "necessary." Meanwhile, 56% of Gen Zers and 59% of Millennials define spending on hobbies and interests as necessities rather than luxuries. They also say that it is better to cut back on long-term savings than to give up certain pleasures, including dining out, travel, and gym memberships.
However, a majority of Millennials (84%) and Zoomers (87%) believe that some non-essential spending has become "necessary." Meanwhile, 56% of Gen Zers and 59% of Millennials consider spending on hobbies and interests a necessity rather than a luxury. They also say that it’s better to cut back on long-term savings than to give up certain pleasures, including dining out, travel, and gym memberships.
Credit Karma’s financial literacy representative, Courtney Alev, says it’s not surprising that young people are finding solace in buying things that bring them pleasure amid economic uncertainty. "The cost of living has remained high for several years, and perhaps younger generations have accepted this as a new reality and adjusted their budgets accordingly."
The most popular non-essentials that have become necessities are streaming services like Netflix and Hulu. The most common non-essentials in the fashion and beauty space that have also become necessities are skincare and cosmetics, new clothes, and beauty and grooming treatments like manicures, facials, or haircuts.
60% of Millennials and 53% of Zoomers say that social media influences their spending habits. In particular, many Gen Z respondents feel more confident because they have financial support, such as help from their parents.