Gen Z spends heavily on experiences: Is it a waste or a reaction to current events?

(Dan Tri) - Gen Z has been criticized for “spending money regardless of the future” when spending heavily on concerts, travel and experiences. But experts say this behavior reflects the economic and psychological pressures they are facing.

A wave of criticism is being directed at Gen Z (those born between 1997 and 2012) when they are willing to spend a lot of money on Taylor Swift concert tickets, trips to Japan or simply waiting in long lines to own a limited edition mug, despite the context of escalating living costs and an uncertain economic future.

Many people call this “doom spending”—spending money without regard for the future. But from the perspective of behavioral finance experts, the picture is much more complex. It is not just impulsiveness, but also a deep psychological reaction to the pressures of the times.

Reward yourself amidst all the worries

Sabrina DaSilva, 23, who works in finance, is a prime example. Despite having a coffee maker at home and free coffee at work, she still spends about $60 a month at coffee shops. “Sometimes you just need a little something to treat yourself,” she says.

That's not the only expense. DaSilva estimates she spends $500-$600 a month on eating out and another $500 on travel .

DaSilva’s habits reflect a broader trend. According to a survey by The Harris Poll for Intuit Credit Karma (USA), up to 87% of Gen Z are willing to spend money on non-essentials such as streaming services, eating out and going to the gym, regardless of their financial situation.

Interestingly, more than half of Gen Z said they were “struggling to make ends meet.” A study from Bank of America also found that most young people still treat themselves to small treats like cake or coffee at least once a week, which can lead to overspending.

This paradox raises a big question: Why does a generation facing great financial pressure seem so "generous" with non-essential expenses?

According to experts, it is normal for Gen Z to spend money on concerts and travel at the age of 20 when they have nothing else to prove (Photo: Getty).

Spending because... "have nothing to contribute"

Morgan Housel, author of "The Psychology of Money," offered an insightful perspective in Fortune, saying that this kind of status-conscious spending is perfectly normal, especially when people are young.

“When I was 20, I thought, ‘I wish I had a Ferrari. I wish I had a mansion,’” Housel said. “Looking back, I wanted those things so badly because I had nothing else to contribute.”

According to Housel, when young people have not found their true purpose in life, or have not built solid internal values ​​(such as career, family, social contribution), they tend to seek external recognition through material things and experiences.

Today, Gen Z faces even greater pressures: inflation, high living costs, and stagnant wages. This makes traditional adulthood milestones that their parents once achieved, such as buying a home and settling down, seem out of reach.

As Housel's life purpose shifted to being a good father and husband, his desire for luxury cars naturally faded. "My material aspirations were inversely proportional to what I could bring to the world ," he concluded.

On the other hand, because they feel stuck on the path to "settling down", Gen Z seeks joy and self-affirmation in smaller, more immediate pleasures: A "healing" trip, a delicious meal, or even taking care of a pet.

When "settling down" is a distant dream

Analysis by Shikha Jain, a partner at Simon-Kucher & Partners, supports this argument. She says Gen Z is spending more on out-of-home experiences like dining out and traveling for two main reasons: They can’t afford to buy a home, and social media makes travel more appealing than ever.

Data from the National Association of Realtors shows that the median age of first-time homebuyers is now 38, up significantly from 35 in 2023. When owning a major asset like a home becomes out of reach, some of the income that would otherwise be used to save for that goal will be "freed up" for experiences.

“Gen Z faces more economic uncertainty than older generations,” Jain said. “They live paycheck to paycheck and have more student debt.”

The “doom spending” mentality also plays a role. And technology makes it easier. Greg Stoller, a lecturer at Boston University’s Questrom School of Business, notes that Gen Z “tends to act on immediate needs.”

“You see something you like, you buy it. No need to pull out a card. Just swipe your phone or watch and you’re done,” he said.

Spend money to make up for lack of confidence

Using money to assert oneself is not just happening with Gen Z. It is common even among millionaires.

Lucy Guo, founder of Scale AI and a billionaire at age 30, is one example. She still shops on Shein and drives a Honda Civic to work. But she admits that before her success, she also spent money recklessly.

According to Guo, if you see a millionaire spending a lot of money on designer goods or luxury cars, it is likely that they are trying to compensate for a lack of confidence.

“People who spend money on designer clothes and nice cars are usually millionaires,” Guo told Fortune. “Their friends are millionaires many times over or billionaires. They feel a little self-conscious and want to show off: Look, I’m successful too.”

This again reinforces Housel's point: When people no longer need to prove themselves, the need for wasteful consumption will naturally decrease.

Sometimes spending money is a way to make up for lack of confidence (Photo: Robb Report).

The "art" of money and transparency

So is Gen Z completely "future-proof"? Actually, no.

The Harris Poll also found that 74% of Gen Zers said they would cut back on non-essential spending if their finances worsened. While this is lower than other generations, it shows they still have a sense of limits.

Many young people are finding balance. Sabrina DaSilva, despite spending heavily on experiences, worked in finance and knows how to budget: 50% of her income for essentials (housing, bills, food), 12% for retirement and 5% for savings.

Another emerging trend is “financial transparency.” Connor Morrow, 25, has a TikTok account dedicated to sharing financial tips and publicly disclosing his monthly expenses. In one video, he said he spent nearly $1,400 on rent, $715 on eating out, $460 on miscellaneous expenses…

Despite the constant criticism he receives for his spending habits, Morrow believes this transparency is necessary. “It shows that people really want to see real, real information,” he says.

As Morgan Housel notes, spending is not a matter of exact math, it’s an art. The way Gen Z spends money today may be confusing to previous generations, but it accurately reflects the lessons, pressures, and values ​​they are pursuing in a volatile world where instant experiences are sometimes a safer investment than a distant dream of settling down.

Source: https://dantri.com.vn/kinh-doanh/gen-z-chi-manh-cho-trai-nghiem-tieu-hoang-hay-phan-ung-truoc-thoi-cuoc-20251115095657623.htm