Stress has driven young people to “financial despair”. Why do they spend money thoughtlessly and don’t want to think about the future?

Youth in 'economic despair' says headline Bloomberg. The high cost of familiar goods provokes thoughtless spending on luxury goods among representatives of generations Z and Y. What are young people ready to spend their last savings on and why are they abandoning traditional concepts of a successful life?

Zoomers live for today due to financial instability

Researchers of economic phenomena in society talk about the emergence of a new trend of doom spending (“doomed spending”). Within its framework, young people spend money as therapy because of their nerves against the backdrop of rising prices. First of all, Zoomers and Millennials make small purchases, because in the current reality they cannot afford to buy a car or a house.

Bloomberg editors specify that 27 percent of Americans aged about 30 prefer to live for today and not save money for the future. According to them, in this way they manage to reduce the level of stress from high prices for food and rent and purchase of housing.

Young people choose fashion brands instead of a financial safety net

Hamilton College economics professor Stephen Wu believes that the habit of mindlessly spending money has become especially widespread in recent years due to the global economic crisis and the coronavirus pandemic. In the current situation, people began to understand that their achievements and failures no longer depend on their own efforts, the scientist believes.

At the same time, the choice of zoomers and millennials often falls on the purchase of luxury goods. So, student Holland, who is receiving a doctorate at the University of Michigan and has received financial help from her family, decided to spend her savings on a Chanel bag. The girl paid $2,500 (approximately 226 thousand rubles) for the vintage accessory.

In turn, 26-year-old Adrian Seaga spent the last of his savings to get a replica of the Burberry bag that was featured in the hit HBO series Descendants. His immediate goals are also to purchase skin care products, a wool coat and a copy of the Hermes Birkin 35 Gold Togo bag worth $1,088 (98 thousand rubles).

The man moved to New York from the Philippines in 2019 in hopes of going to college, finding a decent job and buying a home. However, he currently still lives with his mother, receiving financial support. The Filipino works to help the elderly and people with disabilities. According to him, he realized that his dreams of buying a house were impossible.

Generation Z's dream has changed

However, not everyone considers the impulse purchases made by young people to be a gesture of desperation. For example, 27-year-old Yale University graduate and blogger Maria Melchor, who specializes in financial education for generation Z, disagrees with this point of view. She prefers to view this problem as a change in priorities.

Currently, the number of marriages and the birth rate are declining, the girl notes. At the same time, remote work has opened up the opportunity for many to not be tied to one place of residence. Therefore, Zoomers and Millennials are distributing funds differently that previous generations spent on real estate and children's needs.

“I think that the ‘dream’ is now changing,” Melchor concluded.