- Date : 20/09/2023
- Read: 3 mins
Gen Z's changing financial habits and poorer money mindset are the result of the rising impact of social media and trends like FOMO and YOLO.
69% of Indians neglect to maintain a healthy money management practice, according to a 2023 National Foundation for Financial Education (NFFE) report. In fact, 65% of Gen Z doesn't even maintain a monthly budget.
The FOMO (Fear of Missing Out) and YOLO (You Only Live Once) mindset might be a reason why Gen Z is getting poorer and careless with its finances. Let's discuss these latest trends.
Highlights:
1. Gen Z is finding it difficult to manage its finances led by YOLO-FOMO and a lack of proper financial knowledge
2. Credit card dues have risen by 30% in 2023, twice that of bank loan growth.
3. The popularity of online shopping and Gen Z's overspending habits have led to growth in Buy Now, Pay Later (BNPL) schemes.
Also Read: Financial planning for beginners: A 7-step guide.
YOLO and FOMO: The Relationship With Finance
Living for the moment is a great mantra for life, but not for financial planning. The current generation is heavily influenced by social media.
The need to stay relevant among peers and display a flashy lifestyle on social media is pushing many into financial distress without them realising the long-term financial implications.
Gen Z Trends and Shifts in Financial Habits in 2023
There's a marked decline in financial discipline among young Indians.
Credit card spending jumped by 47% to Rs 14 lakh crore between FY 2021-22 and FY 2022-23. whereas credit card debt surged by 31%.
In the race to reap attractive rewards, young Indians are spending excessively. The result: Poor credit scores resulting in loan rejections and even job reactions!
Also Read: These 4 Steps can help you sync your tax planning with long-term financial goals.
BNPL transactions rose by 21% in India in the first half of 2022, an extra 3% increase from the global average. The advantage and convenience offered by online shopping and BNPL schemes have led to impulsive spending habits.
This is another reason why many young Indians are now debt-trapped.
Also Watch: Why India's youth is getting dumb(er) with money?
How FOMO Can Be Good For Financial Planning
Hence, appropriate financial awareness and discipline in the right direction can help set things right. A few remedial measures to free oneself of a perpetual debt trap are:
- Set a monthly spending budget
- Always read and understand the terms and conditions and hidden charges before opting for any credit card or BNPL scheme.
- Buy what you actually need
Conclusion
Channel your FOMO and YOLO instincts positively to build your financial standing instead of depleting it. Have the fear of missing out on a financially secure future. Additionally, plan for your retirement and emergencies.
Invest in SIPs, trade wisely, and live within your means. Let's change 'what is FOMO' and make it our financial ally.
References:
1. indmoney.com
2. voi.id/en/economy/308249
