Yahoo Finance Half of Gen Z Would Rather Spend Christmas Alone Than Go Further Into Debt — 2 More Holiday Money Hangups and How To Better Cope
The holiday season is upon us — but for some younger generations it can end up being extremely financially stressful.
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And the figures speak for themselves: almost half of Gen Z (48%) respondents said they would rather spend Christmas alone than plunge into debt, according to a survey by financial management app Cleo.
Roxanne Nejad, vice president of marketing for Cleo, said this finding was not only surprising, but also “genuinely disheartening,” as it underscores the significant emotional toll that financial stress takes on this generation during the holiday season.
“It also reflects a commendable commitment to fiscal responsibility but also highlights the unfortunate reality that many young individuals feel compelled to prioritize financial stability over the joy of festive celebrations with loved ones,” she said. “It’s a poignant reminder of the importance of financial literacy and financial planning — and the need for better tools to support this.”
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Turning to Risky Financial Behaviors
Unfortunately, to cope with the financial strain, Gen Z are turning to high-risk techniques. These include 50% of them planning to use high-interest credit cards or buy now pay later (BNPL) services during this holiday season, according to the survey.
In addition, more than a third (39%) intend to dip into their savings to survive from Thanksgiving to the New Year.
Nejad emphasized that missing a payment on a high-interest credit card or a BNPL purchase can not only result in late fees and penalties, but also negatively impact your credit score.
“There’s also a lack of transparency in the way financial products like these operate, which means that consumers aren’t always aware of the difficulties they may get themselves into when using high-interest credit cards or BNPL,” she added.
According to her, this is where technology can play its part. Apps such as Cleo’s AI can provide personalized insights and help users better understand what’s happening with their money.
“We want users to feel empowered to create realistic budgets, understand their bills, and spend or save according to the goals they set for themselves,” she said, adding that unexpectedly having to dip into your savings or use the wrong types of credit to survive during the holiday season isn’t ideal and prevents people from getting out of a debt cycle.
Instant Gratification Instead of Long-Term Financial Goals
The survey also found that there is also a concerning rise in Gen Z spending focused on things that bring immediate gratification instead of long-term financial goals.
For instance, almost half of Gen Z respondents (48%) said they would not sacrifice buying Taylor Swift concert tickets over clearing their debt.
The data also revealed other priorities that come over financial stability — such as spending on Uber (53%), beauty and hair appointments (52%) and Starbucks hot drinks (43%).
“This demonstrates the priorities of the FOMO-generation, where they are choosing activities with immediate gratification instead of buckling down on long-term financial goals,” said Nejad.
How Can Gen Z Improve Financially During the Holiday Season?
Nejad offered a few tips as to how how zoomers can improve their finances during the holiday season.
Budgeting for the Holidays
“The holiday season doesn’t have to be a financial stress fest. Instead of succumbing to the pressure of extravagant spending, embrace budgeting without burning out,” she said.
For instance, make a plan that aligns with your financial reality, factoring in home expenses, groceries, bills and other responsibilities.
Smarter gifting strategies
The spirit of giving should lift your holiday spirits, not increase your financial burden, she noted. Perhaps you could consider organizing gift exchanges with friends or family to minimize the number of presents you need to buy.
Smart shopping and saving tips
“This season, balance festive generosity with smart shopping and saving,” she said. For instance, leverage online deals by signing up for newsletters and alerts from your favorite stores, or explore secondhand shopping options for unique and sustainable gifts.
Embrace group gifting to share the financial load, and don’t underestimate the power of DIY gifts. Cleo’s AI features, like personalized savings goals and auto saving, can “effortlessly integrate into your holiday budget, helping you strike the perfect balance between giving and saving,” she added.
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This article originally appeared on GOBankingRates.com: Half of Gen Z Would Rather Spend Christmas Alone Than Go Further Into Debt — 2 More Holiday Money Hangups and How To Better Cope
