- One-third of Gen Z and millennials admit to having a shopping addiction
- 73% of Gen Z and millennials who have been financially irresponsible say their financially irresponsible era is over
- One-in-five Gen Z and millennials are taking part in “no-buy” year in 2024
Consumer spending has remained strong despite sustained inflation, record-high interest rates and bubbling concerns of a recession. In some cases, consumers are blowing money to cope with concerns about the economy and foreign affairs, while others are spending to fuel their shopping addictions. However, recent online trends like “loud budgeting” are changing the conversation and encouraging consumers to regain control of their finances.
According to a new study conducted by Qualtrics on behalf of Intuit Credit Karma, 33% of Gen Z and millennials have a shopping addiction, which many (30%) say they developed during the pandemic when most people were confined to their homes. Of those who admit to having a shopping addiction, 69% blame social media for fueling their bad habits, calling out Instagram (50%), YouTube (46%) and TikTok Shop (44%) as the top enablers, behind Amazon (78%).
More than half (54%) of Gen Z and millennials who have fallen victim to rampant consumerism say they’ve racked up debt as a result of their shopping addiction with 18% taking on more than $5,001 in debt and another 21% racking up between $1,000 and $5,000 in debt. At the height of their shopping addiction, Gen Z and millennials say they spent the most money on clothing and accessories (64%), shoes (56%), take out and dining out (50%) and beauty/skin care (47%). Others splashed out on electronics (43%), entertainment (35%) and luxury items (32%).
Gen Z and millennials’ heightened awareness of their spending behaviors has led 74% to be more intentional with their spending in 2024. This was especially true for Gen Z and millennials who identify as shopping addicts, 84% of which say they plan to be more intentional about their spending this year. To get off on the right foot, many are turning to social media to learn new ways to manage their money.
According to the study, 48% of Gen Z and millennials say personal finance trends on social media have motivated them to adopt good financial habits, like loud budgeting and “no-buy years.” In fact, 20% of Gen Z and millennials say they’re taking part in a “no-buy year” in 2024, with another 56% taking part in a “low buy year.” For the purposes of this study, “no-buy year” is when consumers commit to not shopping for an entire year, except for items they need to replace, and “low buy year” is when consumers commit to shopping significantly less than they did the year prior. For those unable to commit to a full year, 42% say they’ll dip their toes by doing a “no-buy month” in 2024.
The top categories in which no-buy participants plan to stop shopping include luxury items (39%), including brand-name purses, shoes and scarves, items trending on social media (38%), such as Stanley cups and Wavytalk, and collectibles (37%). For those looking to decrease their spending this year, most will dial back on dining out and ordering take out (69%), clothing and accessories (66%) and entertainment (61%).
The number one reason Gen Z and millennials say they’re doing a “no-buy year” or “low buy year” is to build savings (43%). Others say they feel guilty for overspending (35%) and are tired of living outside of their means (28%). Another 27% say the stress of constantly spending caught up to them, impacting their decision to change their lifestyle.
Could this be the end of Gen Z and millennials’ financially irresponsible era?
According to the study, nearly half of Gen Z and millennials (49%) believe they are currently financially irresponsible or have been in the past. This was especially true for shopaholics, 73% of which say they have been financially irresponsible. Of those, who have or are currently mismanaging their money, 73% say their financially irresponsible era is over.
“For years we’ve been monitoring consumer financial behaviors to understand how consumers are spending and saving, first during the pandemic and then in the months and years that followed,” said Courtney Alev, consumer financial advocate at Intuit Credit Karma. “In the two years following pandemic lockdowns we observed consumers spending money as a way to make up for lost time and then, later, as a way of coping with stress, leading to dwindling savings and high credit card balances – in particular for Gen Z and millennials. Now, we’re pleased to see this trend reversing with Gen Z and millennials adopting new methods for cutting down spending. No-buy and low-buy years are a great way for people to take a look at their spending and make conscious decisions about what they’re cutting down on and what they’re cutting out altogether. For some this may be extreme. If that’s the case for you, I suggest considering a no-buy month, or even starting with one week and building to a month from there. If you’re someone who has been jumping on every new fashion trend, consider taking one month off from shopping for clothing and accessories. You can always window shop and bookmark purchases for later. Then, at the end of the month, if you’re still thinking about the item and have a little extra money set aside, you can make the purchase.”
Methodology:
This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma between February 29, 2024 and March 1, 2024 among 1,993 adults between ages 18 and 43.