Whether it’s global warming, impending economic disaster or the idea of never owning a home, young people are worried about the future – and they’re struggling to cope.
If you haven’t heard of the term, here’s a quick explanation:
Fatal spending is basically spending money on instant, short-term fun rather than saving it for the future to deal with stress and economic worries.
It could be described as Gen Z’s version of retail therapy.
To demonstrate this, here is a TikTok as an example…
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A recent study by Credit Karma found that 43% of millennials and 35% of Gen Z spend a lot to feel better.
Fueled by social media, the trend has almost become the norm, with many young people turning to TikTok to complain about the state of their financial future.
A viral video created by Maria Melchor, also known as @firstgenliving, has been viewed more than 1.7 million times.
In the clip, she says: “We can’t afford anything else. Owning a home or starting a family is so out of reach that we are using our down payment or our children’s money on everything we can afford that will give us some semblance of the kind of adult life we were promised.”
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Thousands of videos have been posted online, with people sharing their experiences of fatal spending, advising others on how to avoid it, or calling the idea stupid.
Louise Hill, chief executive and co-founder of Go Henry, said young people are often influenced to buy things they don’t need as they are continually exposed to new products online.
She highlighted the trend #TikTokMadeMeBuyIt, where users display recent items they purchased online, as an example.
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More than 8.4 million videos using the hashtag have been posted on TikTok.
“A lack of financial education can exacerbate this behavior, as people lack essential money management skills and the ability to differentiate between their needs and wants,” Ms. Hill told the Money team.
“For young people, the ongoing cost of living crisis, student loan debt and the feeling that they will never be able to afford major purchases like a home can push them toward catastrophic spending.
“Social media can also increase purchasing pressure, especially if they see influencers or friends showing off their latest purchases online.”
While fatal spending may seem like a harmless habit, it can lead to a cycle of struggling to save and financial problems if people start borrowing money to pay for it.
Hill warned the situation could become more “difficult” if people choose to buy now and pay later plans to finance it.
“Spending excessively now can also make it difficult to save for major purchases. Understanding the difference between needs and wants is crucial as it helps prioritize spending on essential items and reduces unnecessary expenses,” she said.
She advised people to create a savings goal and work towards it when they want to buy something new, rather than buying it right away.
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“When you have saved enough for this, think about whether you still really want it. This is a good way to practice mindful spending and stop always seeking instant gratification,” she said.
“All children and teenagers need to understand how money and spending are linked to their self-esteem. You can’t buy a lifestyle and you won’t feel better about the future by spending too much now.
“With small steps like these, young people will have the confidence to save for a range of goals, say no to peer pressure and find better ways to cope when they feel down.”
This story originally appeared on News.sky.com read the full story