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.
  • ‘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.

Want to know more?

This is just a glimpse into our extensive reporting for members. Get in touch so someone from the Stylus team can explain how your business can harness the power of trends and insights like these – and more.

Want to know more?

This is just a glimpse into our extensive reporting for members. Get in touch so someone from the Stylus team can explain how your business can harness the power of trends and insights like these – and more.