Gen Z's finances under strain due to 'lifestyle culture' trends?

Gen Z sets to become the most significant consumer group in history, but overspending could be a concern

Generation Z, born between 1997 and 2012 and currently aged 13 to 28, is poised to make a significant impact on the global market. According to a recent report by NielsenIQ, Gen Z is expected to become the largest, richest, and most significant consumer group in history by 2030, accounting for $12.6 trillion or 18.7% of global spend.

However, a new trend among Gen Z, known as the "treat culture," could potentially lead to overspending. Nearly 60% of Gen Z admit to indulging in this culture, making purchases as a form of self-care and positive reinforcement. These small indulgences, which range from snacks to conveniences, can add up, leading to consistent overspending on items that may not be necessary.

The "treat culture" among Gen Z is a response to inconveniences and is often used as a form of self-care. A Bank of America report from late July indicates that 57% of Gen Z buy themselves a small treat at least once a week. This trend is further fuelled by the focus on convenience and influence from social media, which are contributing factors to Gen Z's potential to reshape markets and consumer preferences.

Despite their spending habits, Gen Z workers view their job as a 'situationship.' A new survey suggests that 58% of Gen Z workers hold this perspective, citing the cost of living as a big issue. As a result, Gen Z tends to prefer splurging on smaller goods and everyday items instead of bigger purchases like houses.

However, it's important for Gen Z individuals to consider the long-term implications of their "treat culture" purchases. When considering a "treat" purchase, they should ask themselves if they really need the item and if the need will persist over time. Occasionally, Gen Z indulges in bigger purchases like concert tickets or flights for trips, but these should be treated as exceptions rather than the rule.

Gen Z is sandwiched between the millennials and Gen Alpha, and while they are known for their spending habits, Gen Z might be spending more. It remains to be seen how this generation's unique approach to consumerism will shape the market in the coming years. The "treat culture" among Gen Z may lead to overspending, potentially keeping individuals broke, or it could be a sign of a generation that values experiences over material possessions. Only time will tell.