- Americans will still be borrowing money to travel, eat out, and go to concerts in 2024.
- According to the report, young people in particular are more focused on enjoying life now rather than saving for the future.
- One expert said, “One reason for this is the idea that you only live once,” which has become stronger during the pandemic.
Taylor Swift performs on stage during the opening night of the Taylor Swift | The Elus Tour at State Farm Stadium.
Kevin Mazur | Getty Images Entertainment | Getty Images
The revenge spending isn’t over yet.
Even though Americans carry $1.13 trillion in credit card debt, consumers still tend to splurge on impulse purchases. This is a phenomenon also known as “catastrophic spending,” or spending money despite economic and geopolitical concerns.
According to a recent survey, approximately 38% of adults plan to take on more debt over the next year to travel, eat out, and watch live entertainment. Report by Bankrate.
A quarter (27%) of those surveyed said they would take out debt to travel this year, while 14% said they would eat out even if they were broke and a further 13% said they would go to the theater or play sports. He answered that he would borrow money to go and watch the live broadcast of the TV show. Bankrate was spotted attending events and concerts, including the European leg of Taylor Swift’s Elas Tour.
“Demand for out-of-home entertainment remains strong,” said Ted Rothman, senior industry analyst at Bankrate.
“Part of this reflects the ‘you only live once’ mentality that has been reinforced during the pandemic, and part of it is because many economic indicators, such as GDP growth and unemployment rates, are in good shape,” Rothman said. said.
Bankrate research shows that younger people, especially Gen Z and Millennials, are more likely to splurge on such discretionary purchases.
While the rising cost of living has created particular challenges for those just starting out, other research has also shown that young people have a more relaxed approach to long-term financial security. There is.
73% of Gen Zers between the ages of 18 and 25 say they would rather improve their quality of life than cut spending to increase savings or put extra money in the bank, according to the Prosperity Index report. announced. intuition found.
Gen Z workers are also the largest group of non-savers, according to another Bankrate study.
“The impact of the pandemic cannot be overstated. It has changed the way many people view their spending and, as a result, people are more focused on the now rather than thinking about 40 years from now. I did.” Matt Schultz, Chief Credit Analyst at LendingTree and author of “Ask Questions, Save Money, Make More.”
But it will have an impact later on, he added.
When saving for long-term goals, young adults risk losing a huge advantage: time.
“The money you save in your 20s grows over time,” Rothman says. The sooner you start, the more likely you are to benefit from compound interest and the money you earn can be reinvested for even more profit.
At least try to find a balance, Rothman advised. Automate some of your income into savings and incorporate fun into your budget, he said. “At least that way he won’t have to pay 20 percent interest on his credit card.”