Anti-Frugal Gen Zers Spend Through Economic Turbulence

Published 14 December 2022

Author
Emilia Morano-Williams
2 min read

Geopolitical instability and economic uncertainty have young people adopting a seize-the-day mentality. They’re swapping long-term savings for dopamine-spiked daily indulgences and potentially lucrative alt-investments. Stylus explores how brands can respond to these spending trends responsibly.

  • ‘Emotional Spending’ Inspires Indulgence: Young Brits are luxuriating in micro-splurges despite the cost-of-living crisis. Over a quarter (26%) say they won’t stop buying new clothes, while 44% will continue purchasing their favourite pricey foods, and 32% will keep investing in beauty treatments (HyperJar, 2022). These mini-indulgences may offer immediate comfort, but experts say they also create an illusory feeling of financial control. This presents a tricky spot for brands that want to encourage spending. Be proactive with messaging around responsible budgeting.

  • Americans’ Savings Gap: In the US, 45% of 18- to 35-year-olds say they’re not motivated to save until the world “returns to normal” (Fidelity, 2022). But with the rising incidence of extreme weather and geopolitical instability, the re-emergence of “normal” looks increasingly distant. Consequently, 21% of US Gen Zers and millennials recently closed investment or brokerage accounts (Ally Financial, 2022). This isn’t a youth-exclusive reaction: in October 2022, Americans collectively saved the lowest portion of their income since 2005 (Bureau of Economic Analysis, 2022).

  • Between Risk & Security: Divergent savings attitudes are emerging: some youngsters crave stability, while others lean into risk. In the US, 74% of Gen Zers say they’d prefer job security over a role at a prestigious company (Handshake, 2022). Meanwhile, 30% of this generation are open to investing in alternative assets – including wine, crypto and art – if they haven’t already done so (Lansons, 2022). To understand these mindsets, brands should follow the personal finance industry’s pivot into entertainment.

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