In what was once a marker of adulthood, owning a home, settling down, and reaping the rewards of hard work seem distant dreams for today’s youth. Now many Gen Z and millennials are skipping the savings game, opting for lavish getaways, $250+ fragrances, and designer handbags instead.
Despite repeated warnings that they’ll end up stuck living with their parents forever if they don’t get their finances in order, 90% of 18 to 34yrs would consider buying from a luxury brand.
Even in a cost-of-living crisis, just 17% of young people today describe luxury as unaffordable, according to The Luxury Refocused report. Once ultra-expensive delicacies like caviar have seen a surge in sales thanks to TikTok fuelled trends inspiring Gen Z.
So why are the youth of today seemingly throwing in the towel on home ownership?
“Most of my expenses go on holidays,” says Anette Suveges, a 27-year-old account executive at Harpswood PR. Out of her £35,000 ($44,000) annual income, she has already splurged over £6,000 ($7,600) on trips to the Maldives and South East Asia in the last year alone.
“I’m just not interested in even 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 that I want right now—even if I have to live paycheck to paycheck.”
“I don’t even know what I want,” echoes 26-year-old Jamie Rossouw, 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 that people tell you that you should do.”
One of those people is her stepmother, who does marketing for the mortgage department at Barclays. But instead of taking her advice and saving up for a house deposit, Rossouw has been prioritizing putting money aside each month to specifically spend on vacations and little luxury pick-me-ups.
“If I’m saving every single cent that I can to save towards a house, and you can’t tell me in the next 10 years, if that’s even attainable, what am I saving for?” she asks. “Also, COVID put things into perspective in a sense that I want to explore, I want to see the world and that is something that is attainable and something that I can do now.”
While her millennial stepmother may treat herself once or twice a year, Gen Z Rossouw says she wouldn’t think twice about spending hundreds on the spot on something in a shop window that catches her fancy.
“Literally, live life,” Suveges says.
Gen Z aspiring to an influencer luxury lifestyle
Private club Velloy promises its members access to luxury travel, experiences and exclusive designer sales—and despite having only just started earning salaries, Gen Zers make up its fastest-growing group of members and are the company’s biggest spenders when it comes to luxury goods.
Hugo Cannon, the founder of the members-only concierge service, tells Fortune that Velloy is seeing a surge in young people using the platform to impress their social media followers and look more affluent.
“Generally there’s this trend of people aspiring to this influencer luxury lifestyle a lot more,” Cannon says. “We’ve seen it with cars… People renting like a Ferrari or a Lamborghini for a single day to drive around to get pictures and content.”
“Once you have already set the bar standard for how you look on Instagram or social media, you kind of want to keep that look,” echoes 26-year-old visual merchandising coordinator, Aleah Wright.
This mindset had gotten some members of her generation trapped in a cycle of trying to emulate their peers online and then keeping up with that “aesthetic”.
What’s more, “keeping up with the Joneses”, is not only driving Gen Z to spend their money instead of saving it—it’s also contributing to some poor investment purchases.
“For instance, the people that use us to source Birkins, if they’re getting them at retail value they are making a two or three times return on investment—at a minimum,” Cannon adds. “But people are buying similar brands that they consider to be luxury, but they’re not investment pieces.”
Interestingly, many of the Gen Zers that Fortune spoke to saw their luxury purchases as an “investment” in their memories.
For example, when Wright finished her Prada internship 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 have a memory of it,” she says, adding that it was the first on her designer bags wishlist—including Loewe’s Puzzle bag and Chanel’s Jumbo Flap—which she plans on ticking off over the next couple of years.
“I feel like my bags are investments,” she explains. “It’s an investment in my wardrobe that I’ll be wearing for years and years and years… I don’t plan on selling my Prada bag, I want to pass that down to my kids.”
Like many others in her generation, Wright also considers jet-setting as an investment.
She’s prioritizing saving up for more trips around Europe over getting on the property ladder until she hits her thirties at least.
“Saving money is great and being able to attain bigger goals like a car or house is great. But being able to spend money on the things that you’re going to enjoy like a trip that you’ll never forget or bags that you love and wear for years is also worth it,” she adds. “Like those are memories I’m gonna have and never forget.”
“It’s like the classic quote, ‘money comes and goes, but the memories last a lifetime’,” Cannon chuckles.
A lack of hope in the housing market
A sizable chunk of Gen Zers are running through their money—or rather, doom spending—because they doubt they’ll ever be able to get on the property ladder.
Essentially, splurging feels better than stressing about potentially renting into retirement.
“I think it boils down to lack of hope,” says Rossouw. “With the current market, the cost of living crisis and just the way things are going, buying a house doesn’t seem attainable.”
It’s why Suveges describes her generation’s self-sabotaging spending habits as an act of “rebelling against getting on the property ladder”.
“The whole property market is ridiculous and honestly, I refuse to be a slave for them,” she explains. “Me and the rest of my peers, we see through the flaws in the system and that it’s ultimately the salaries and the economy that makes a difference, not our purchasing decisions.”
In her view, even if she put away £500 ($640) a month, it still wouldn’t guarantee that she would be able to buy a house as interest rates and property prices rise rapidly.
However, it would diminish her current quality of life “because saving that much would mean literally not leaving the house.”
To make matters worse, her generation isn’t even sure if there will be a future to enjoy anyway.
With geopolitical tensions and climate change on the verge of a catastrophic tipping point, some are spending like there’s no tomorrow.
“I’m just focusing on the present because the future is depressing,” Suveges concludes.
“I think there’s a lot to say about people wanting to distract themselves from what’s going on,” Rossouw echoes. “The future is uncertain at the moment—with the wars going on and the rising cost of living, it just doesn’t seem worth saving for.”