Once the hallmarks of adulthood, owning a home, settling down, and reaping the rewards of hard work seem like faraway dreams for today's youth. Now, many Gen Z and Millennials are skipping the thrifting game and opting instead for luxury vacations, $250+ fragrances, and designer handbags.
Despite repeated warnings that they will end up living with their parents forever if they don't get their finances in order, 90% of 18-34 year olds are considering buying from luxury brands.
According to a report by The Luxury Refocused, only 17% of young people today describe luxury goods as unaffordable, even in a cost-of-living crisis. Once an ultra-expensive delicacy like caviar, sales have skyrocketed thanks to a TikTok-fueled trend that inspires Gen Z.
So why do young people today seem to be abandoning homeownership?
“Most of your spending goes away on holidays,” says Annette Svediz, 27, account executive at Harpswood PR. She has already splurged more than £6,000 of her £35,000 ($44,000) annual salary on trips to the Maldives and Southeast Asia in the last year alone.
“I'm not even interested in thinking about what's going to happen in five or 10 years,” Svegis says. Now – even if I have to live paycheck to paycheck. ”
“I don't even know what I want,” says Jamie Rossouw, 26, a data journalist at an advertising magazine. motion. “I don't know if I want to get married. I don't know if I want to have children. I don't know if I want to own real estate. It's just something people tell you you should do.”
One of them is her stepmother, who works in marketing for Barclays' mortgage division. But instead of taking her advice and saving up for a down payment on her home, Rossu is making it a priority to save money each month specifically to spend on her vacations and small luxury pastimes.
“If I'm saving every penny I can to buy a house, and I don't know if I'll be able to do it in the next 10 years, what am I saving for?” she says. I will ask. “COVID-19 has also put things into perspective in the sense that I want to explore and see the world. It's achievable and it's something I can do now.”
Millennial stepmoms may treat themselves once or twice a year, but Gen Z Rossouw is hesitant about spending hundreds of dollars on something that catches her eye in a shop window. I say no.
“Literally live life,” Svegis says.
Gen Z aims to live a luxurious lifestyle like an influencer
Private club Velloy promises members access to luxury travel, experiences and exclusive designer deals. Despite just starting to earn a salary, Gen Z is the fastest growing member group and the company's biggest spender when it comes to luxury goods.
Hugo Cannon, founder of the members-only concierge service, says: luck Veroi says there has been a surge in young people using the platform to impress their social media followers and appear more affluent.
“In general, people tend to aspire more to the lavish lifestyles of these influencers,” Cannon says. “We've seen it with cars…people renting things like Ferraris and Lamborghinis for a day and driving around to get photos and content.”
“When you've already set standards for how you look on Instagram and social media, it's tempting to maintain that look,” agrees Aleah Wright, a 26-year-old visual merchandising coordinator. say.
This mindset has led some of her generation to fall into a cycle of trying to imitate their peers online and maintain that “aesthetic.”
Additionally, “keeping up with the Joneses” is not only leading Gen Z to spend money instead of saving it, but also to purchase some unsuitable investment products.
“For example, people who use us to source Birkins are making at least a two to three times return on investment if they are buying Birkins at retail price,” Cannon added. . “But people are buying similar brands that they consider to be luxury goods, but they are not investments.”
Interestingly, many Gen Z luck Those we spoke to viewed luxury purchases as an “investment” in memories.
For example, when Ms. Wright finished her Prada internship, she commemorated the moment by purchasing a recently discontinued Prada Gauffre bag. This bag can be found used online for around $600.
“I wanted to treat myself to something memorable,” she said, adding that it was first on her designer bag wishlist. Her collection also includes a Loewe puzzle bag and a Chanel jumbo flap, which she plans to purchase next, she added. A few years.
“I feel like my bags are an investment,” she explains. “This is an investment in a wardrobe that I'll wear year after year after year…I'm not going to sell my Prada bags. I want to pass them on to my children.”
Like many others of his generation, Wright views flying jets as an investment.
She's prioritizing saving money for a trip to Europe over getting on the property ladder, at least until she's in her 30s.
“Saving money is great, but being able to achieve bigger goals like a car or a house is great. But spend your money on things you enjoy, like a trip you'll never forget or a favorite bag you'll use for years.” There is value in being able to use it,” she added. “Those are memories I will never forget.”
“It’s like the classic quote: ‘Money comes and goes, but memories last a lifetime,’” Cannon laughs.
Lack of hope in the housing market
A sizable portion of Gen Z is spending money — or rather, spending catastrophically — because they doubt whether they'll be able to climb the wealth ladder.
Basically, I feel it's better to splurge than stress about potentially spending your retirement living in a rental.
“I think it boils down to a lack of hope,” Rossu said. “Given the current market, the cost of living crisis, and the current situation, it seems impossible to buy a home.”
This is why Svedis describes his generation's self-destructive spending habits as an act of “rebellion against getting on the wealth ladder.”
“The whole real estate market is ridiculous, and honestly, I refuse to be their slave,” she explains. “My colleagues and I see the flaws in this system and understand that ultimately it is pay and economics that make a difference, not purchasing decisions.”
In her opinion, even if she were to put aside £500 ($640) a month, there is still no guarantee she would be able to buy a house, as interest rates and property prices are rising rapidly.
However, it would reduce her current quality of life. Because “saving that much money means literally not leaving the house.”
What's worse, her generation doesn't even know if they have a future to enjoy at all.
As geopolitical tensions and climate change reach a catastrophic tipping point, some people are living like there's no tomorrow.
“The future is depressing, so I only focus on the present,” concludes Svedis.
“I think there's a lot to be said for people wanting to distract themselves from what's going on,” Rossouw agrees. “The future is uncertain at the moment. With the war going on and the cost of living rising, it doesn't seem worth saving.”
This article originally appeared on Fortune.com
