Let’s say you’re out on a car ride with your friends and you pass your favorite ice cream shop. You’ve spent a lot of money on food and gas this week, but the idea of picking up your favorite dessert is too appealing to pass up. Do you resist the temptation and save your money, or do you swipe your card once more to make the most of the moment? If you’re of an older generation, you might think the seemingly smarter, more cost-efficient option is a no-brainer. However, the majority of Generation Z, or Gen Z, would likely choose the ice cream every time.
Generation Z, born between the years 1997 and 2012, has many differences from previous generations, just like any other. As the current second-youngest generation, individuals finding themselves in this group have been shaped by advancements of the digital age in their most formative years. This has led them to become more reliant on modern-day technologies and extremely diverse in matters of expressing themselves both politically and artistically. Among the most noteworthy of these generational differences, however, is their desire to spend.
A study conducted by Morgan Stanley, an investment banking company, found that Gen Z spends an excessive cut of their income on eating out, transportation and apparel. Roughly 70 percent of Gen Z eats out at least once a week, and 40 percent of Gen Z females shop for clothing at least twice a month. While older generations may consider this overindulgent spending a result of immaturity or a lack of self-control, post-pandemic activities and outside stress may help explain Generation Z’s spending habits.
As a Gen Z teenager myself, I can confirm that I will confidently spend a large portion of my income on things deemed ‘unnecessary’ by my parents and other adults. I’ve seen my friends also impulsively buy anything, from morning coffee to a swinging duck for their car. Not only do I engage in these consistent shopping sprees, I endorse them. Why wouldn’t I? By doing so, I’m endorsing happiness.
We’ve all heard the old saying that ‘money can’t buy you happiness,’ which, in theory, is true. Money alone cannot develop fulfilling relationships or keep you in good health; however, happiness does not necessarily stem from the action of spending money, but the idea of self-governance. Research shows that allowing younger generations to make their own financial decisions promotes a healthier self-view of being responsible and charitable. The majority of Generation Z are currently in their late teens to early twenties, so it makes sense that as they’re starting to care for themselves as adults, they may find great joy in spending money as a celebration of their newfound freedoms.
Similarly, the single swipe, insert or tap of a card creates an experience that saving money could not allow. Generation Z, despite being avid spenders, values experiences over material possessions. The global pandemic, which they experienced in some of the most formative years of their lives, restricted many of the traditional experiences that teenagers dream of including prom, graduation and getting their licenses.
Research from McKinsey, a management consulting company, conveys that Gen Z is more willing to spend their money on things that will enrich their daily lives. There are numerous ways to invest in experiences, and they don’t always have to be extravagant. While splurging on a unique road trip or vacation is an option, Generation Z believes that even smaller expenses, such as dining out or buying a new article of clothing, can enhance their shared experiences with loved ones.
At the end of the day, however, Generation Z loves spending as a coping mechanism for stress. The BBC found that Gen Z, even at their young age, experiences the most stress out of any generation, with a shocking 91 percent of 18 to 24 year-olds reporting this feeling. Shopping can be an extremely helpful tactic in relieving this stress; hence the term, ‘retail therapy.’
In such stressful times, I don’t see the harm in picking yourself up a nice treat or buying yourself a relaxing self-care treatment. In addition to their stress levels, Generation Z also has the highest reports of depression and anxiety. If buying themselves things genuinely makes them happy, it’s important to take advantage of the moment.
Though it’s important to save a good chunk of your income for emergencies and necessities, it should not impose a feeling of restraint or confinement. Empowering this growing generation to use their money as they see fit can instill a sense of control over an important aspect of their lives, lowering stress and significantly boosting their moods. Whether we’re investing in memorable experiences with loved ones, pursuing personal passions or simply treating ourselves from time to time, our spending decisions can be a powerful tool in the pursuit of happiness.
