Inflation and other economic crises have been largely discussed, with many consumers across all generations expressing building stress over personal finances. The conversation has led to lifestyle changes and, of course, sparked numerous social media trends. Still, even with concern top of mind, consumer spending remained strong.
To understand consumers’ current sentiment about spending, a new survey from Qualtrics on behalf of Intuit Credit Karma which surveyed nearly 2,000 adults between the ages of 18 to 43, asked consumers about spending habits and plans for change.
“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.”
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According to the survey, on-third of Gen Z and Millennial consumers believe they have developed a shopping addiction, with 54 percent reporting that falling victim to rampant consumerism has racked up debt as a result of their addiction. At the height of these shopping addictions, Gen Z and Millennials said they spent the most on clothing and accessories (64 percent), shoes (56 percent), takeout or dining out (50 percent) and beauty or skin care (47 percent).
Nearly three-quarters of consumers said they have been in a “financially irresponsible era,” but that time is now over. Eighty-four percent of the survey respondents who said they have a shopping addiction shared plans to be more intentional with their spending in 2024.
Notably, survey respondents shared that social media had fueled both the desire to shop and the motivation to adopt good financial habits. Sixty-nine percent of those who admitted to having a shopping addiction blame social media for fueling their bad habits, with half calling out Instagram, 46 percent calling out YouTube and 44 percent calling out TikTok shop as the “top enablers.” Amazon was cited as the most influential in spending with 78 percent calling out the platform.
Still, almost half of Gen Z and Millennials said that trends on social media have prompted them to practice better financial habits. Two of the buzziest personal finance trends on social media are the “no buy year” and “loud budgeting.” A “no buy year” is the challenge for consumers to commit to not shopping an entire year, except for the items they need to replace. A lesser, more approachable version of this is the “low buy year” where consumers commit to shopping significantly less than the year before. “Loud budgeting,” however, is the act of declining social outings in order to save money and telling people that finances are the reason for not attending.
Twenty percent of Gen Z and Millennial respondents said they are participating in a “no buy year” in 2024 while 56 percent are practicing a “low buy year.” Another 42 percent said they are practicing with a “no buy month” in 2024 to test the waters.
Inuit Credit Karma’s data found that categories most likely to see a decline in spending due to “no buy years” include luxury items (39 percent), items trending on social media (38 percent) and collectibles (37 percent). Consumers looking to decrease spending this year with “low buy years” said they will most likely cut back on dining out or ordering takeout (69 percent), clothing and accessories (66 percent) and entertainment (61 percent).
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