What was once a marker of adulthood – owning a home, settling down and reaping the rewards of hard work – seems a distant dream for today's young people. Today, many Gen Zs and millennials are avoiding the thrifting game and instead opting for lavish getaways, $250+ perfumes, and designer handbags.
Despite repeated warnings that they will end up blocked live with their parents forever If they don't get their finances in order, 90% of 18-34 year olds would consider purchasing from a luxury brand.
Even during a cost of living crisis, only 17% of young people today describe luxury as unaffordable, according to the Luxury Refocused report. Formerly very expensive specialties like caviar have experienced a sales increase thanks to TikTok-fueled trends that inspire Gen Z.
So why do today’s young people seem to be throwing in the towel when it comes to homeownership?
“Most of my spending is on vacations,” says Anette Suveges, a 27-year-old account executive at Harpswood PR. From her annual income of £35,000 ($44,000), she has already spent more than £6,000 ($7,600) on trips to the Maldives and Southeast Asia in the last year alone.
“I'm just not interested in thinking about what's going to happen in five to 10 years,” Suveges says. “I'm just going to live for the moment, spend the money I have, and enjoy the things I want right now, even if I have to live paycheck to paycheck.”
“I don’t even know what I want,” echoes Jamie Rossouw, 26, a data journalist at the advertising magazine Campaign. “I don’t know if I want to get married. I don't know if I want children. I don't even know if I want to own property. It's just something people tell you you should do.
One of those people is her mother-in-law, who does marketing for the mortgage department of Barclays. But instead of taking her advice and saving for a house deposit, Rossouw prioritized putting money aside each month to spend specifically on vacations and luxury pick-me-ups.
“If I’m saving every penny I can for a house and you can’t tell me in the next 10 years if it’s feasible, why am I saving?” she asks. “Also, COVID has put things into perspective in the sense that I want to explore, I want to see the world, and this is something that is achievable and that I can do now.”
While his millennial mother-in-law might treat herself once or twice a year, Gen. Zer Rossouw says she wouldn't hesitate to spend hundreds of dollars locally for something in a storefront she likes.
“Literally, live your life,” Suveges says.
Generation Z aspires to an influential luxury lifestyle
The Velloy private club promises its members access to luxury travel, experiences and exclusive designer sales. And although they've only just started earning a salary, Gen Zers are the fastest-growing group of members and are the company's biggest spenders on luxury goods. .
Hugo Cannon, the founder of the members-only concierge service, tells Fortune that Velloy is seeing an increase in young people using the platform to impress their social media followers and appear richer.
“In general, there's this trend where people are a lot more striving for this influencer luxury lifestyle,” Cannon says. “We saw it with cars…people renting a Ferrari or a Lamborghini for just one day to get around and get photos and content.”
“Once you have already set the standard for appearance Instagram or on social media, you kind of want to maintain that look,” echoes visual merchandising coordinator Aleah Wright, 26.
This mindset has stuck some of his generation in a cycle of trying to imitate their peers online and then following that “aesthetic.”
Additionally, “keeping up with the Joneses” not only causes Gen Z to spend their money instead of saving it, but it also contributes to some bad investment purchases.
“For example, people who use us to stock up on Birkins, if they get them at retail price, they're getting at least a two or three times return on investment,” Cannon adds. “But people buy similar brands that they consider luxury, but they are not investments.”
It is interesting to note that many of the members of Generation Z who Fortune those surveyed viewed their luxury purchases as an “investment” in their memories.
For example, when Wright finished her internship at Prada, she commemorated the moment by purchasing the recently discontinued Prada Gaufre bag, which can be found second-hand online for around $600.
“I wanted to treat myself and buy something to keep as a souvenir,” she says, adding that it was first on her wish list of designer bags, including Loewe's Puzzle bag and the Jumbo Flap from Chanel, which she plans to check off during the month. the next two years.
“I feel like my bags are investments,” she explains. “It's an investment in my wardrobe that I will wear for years and years…I don't intend to sell my Prada bag, I want to pass it on to my children.”
Like many others of his generation, Wright also views jet-setting as an investment.
She prioritizes saving for further trips around Europe over becoming a homeowner until she is at least in her 30s.
“Saving money is great, and being able to achieve bigger goals, like a car or a house, is great. But being able to spend money on things you'll enjoy, like a trip you'll never forget or bags you love and wear for years, is also worth it,” she adds. “These are memories that I will have and will never forget.”
“It’s like the classic quote: ‘Money comes and goes, but memories last a lifetime,’” Cannon laughs.
A lack of hope in the real estate market
Much of Gen Z is short of money – or rather, catastrophic expenses…because they doubt they will ever get onto the property ladder.
Essentially, splurging is more enjoyable than worrying about a potential rent when retired.
“I think it comes down to a lack of hope,” Rossouw says. “With today's market, cost of living crisis and how things are changing, buying a home doesn't seem feasible.”
This is why Suveges describes his generation's self-sabotaging spending habits as an act of “rebellion against getting onto the property ladder.”
“The whole real estate market is ridiculous and honestly, I refuse to be their slave,” she explains. “I, and the rest of my peers, see through the flaws in the system and that it is ultimately wages and the economy that make the difference, not our purchasing decisions.”
She says even if she put aside £500 ($640) a month, it still wouldn't guarantee she would be able to buy a house as interest rates and house prices rise rapidly .
However, this would decrease his current quality of life “because saving that much would literally mean not leaving the house.”
To make matters worse, his generation doesn't even know if they will have a future to enjoy anyway.
As geopolitical tensions and climate change teeter on the brink of catastrophic tipping pointsome spend like there is no tomorrow.
“I only focus on the present because the future is depressing,” concludes Suveges.
“I think there’s a lot to be said for people wanting to distract themselves from what’s going on,” echoes Rossouw. “The future is uncertain at the moment: with ongoing wars and rising costs of living, it’s simply not worth saving.”
