Certainly today’s millennials and Gen Zers are the not the first demographic groups to be aspirational and outspend their incomes. Baby boomers were quite good at it back in the day (some still are).
But today these generations seem to be taking this to a new level, causing the coining of the label HIFIs. That stands for high-income, financially insecure and while that’s never a good combination it takes on new meaning in an economy where inflation is the highest in decades and the influences of social media – and media in general – are putting extra pressure to spend now and worry about it later.
The online Business Insider newsletter recently profiled the HIFIs, citing coverage from Sherwood News that said those under 40 “want to exude old money or quiet luxury but who are struggling to keep up with their lifestyle creep.” It cited a Credit Karma survey that said 48% of Gen Zers and 59% of millennials say “they fell behind financially.. (even though) they are accumulating more wealth earlier in their life than previous generations.”
The report also cited several other factors: increased spending during the pandemic driven by stimulus checks that has continued even as the checks have stopped, homebound consumers who shopped more online; “buy now, pay later” services and a continuation of all of these spending habits even as they resumed going to restaurants and traveling on vacations.
There’s also the impact of the increased visibility of celebrities with expensive clothing, homes, cars and travels: younger consumers want the same and are willing to pay for it, regardless of whether they can afford it.
It’s why the Business Insider report cites a study from online payment services company Pymnts that “found in its February/March report that 36% of millennials in US cities making $200,000 or more a year are currently living paycheck to paycheck.”
Not a great scenario for these next gen consumers.