While Generation X had to worry about keeping up with the Joneses, it seems Gen Y is in a never-ending, up-hill battle trying to keep up with the Kardashians. And keeping up with the Kardashians is exhausting. Not to mention expensive. Maintaining a designer wardrobe, buying the latest accessories, having monthly beauty treatments, paying for the latest technology, diets and gym memberships is almost a full time job - and on the average salary it’s virtually impossible to maintain.
Today, we live in a celebrity-obsessed culture. Gen Ys are increasingly preoccupied with celebrity image and with constantly changing trends so pervasive a “credit crazy” generation has emerged.
Research shows that younger Australians use credit to acquire anything and everything to mimic the styles of celebrities and as a result they are now drowning in debt. Up to one third of Gen Ys have no savings, and around 42% of Australians under the age of 24 owe between $10,000 to $30,000 of credit card and personal debt.
How it’s done
With their high level of purchasing power, Gen Ys are being ruthlessly targeted through sneaky advertising tricks and ridiculously powerful advertising tools. Marketers are preying on the weaknesses of the younger generation by bombarding them with celebrity-endorsed media. Search engines monitor browsing history and social media giants use raw profile information to filter, seek out and target niche audiences.
Emotions vs goals
Advertisers play on inherent human emotional desires such as the desire to look our best, to appeal to society and to enhance our self-esteem by making others envious. Emotional spending can be very costly and can de-rail your budget, and your long term goals - especially if you do it consistently. When you’re emotional, it’s easy to rationalise a purchase because it makes you feel better momentarily. However, over the longer term, you will more than likely feel remorse, particularly if your debt is getting out of control.
Making smarter buying decisions
The debt struggle can be emotionally and financially crippling, but there is a way out. If you can reduce your unconscious spending and make smarter buying decisions you can get out of debt. Here’s how to do it.
- Get your head back in the game. It just takes discipline and willpower.
- Recognise sneaky marketing tactics and become conscious of marketing strategies.
- Pinpoint your spending habits – understand when your spending is based on an emotional desire and stop it in its tracks.
- Consider your purchases carefully – take only the amount of cash you need when shopping and leave your credit cards at home.
Remember, you are not what you buy. Going into debt to buy material items will not make you happy over the long term. You do not need expensive material possessions to live a good life.
If you’re struggling with debt and need assistance, please contact us. We can help you get out of debt and back on track to achieving your goals without giving up the pleasures of life.
a) Not for publication
‘Gen Y has little understanding of financial planning, struggles with debt: study’ http://www.abc.net.au/news/2013-11-20/new-research-generation-y-financial-planning-debt/5105552
RateCity Consumer Study August 2014 http://www.ratecity.com.au/media-room/generation-debt-y-australians-are-credit-crazy
Celebrity lifestyles create debt for young Australians’
‘The psychology of spending’
b) For publication