https://www.mk.co.kr/news/economy/11203866
금융연구원 “전 세계 MZ 불필요한 소비, 할부·후불 많아” - 매일경제
불필요 지출 베이비붐 세대 2배 신용카드 할부 선호도 높아
www.mk.co.kr
2024-12-26
Introduction
A recent study by the Korea Institute of Finance has shed light on the concerning spending habits of the global Millennial and Gen Z (MZ) generations. The report highlights their tendency to make unnecessary purchases and their preference for installment and deferred payment options, raising concerns about their financial stability and the potential economic impact.
Unnecessary Spending Twice as High as Baby Boomers
The report cites data from analytics firm Pymnts, which reveals that 78.8% of Millennials and 73.7% of Gen Z respondents spent over $100 on non-essential items or services such as clothing and mobile games. In contrast, only 43.1% of Baby Boomers reported similar spending habits. This stark difference underscores the MZ generation's propensity for discretionary spending compared to their older counterparts.
Preference for Installment and Deferred Payments
The study also found that 44% of Millennials and 38% of Gen Z have plans to use credit card installments, while only 7.6% of Baby Boomers and the elderly population intend to do so. This reliance on installment plans and deferred payments among younger generations is a worrying trend that could lead to long-term financial difficulties.
Financial Uncertainty Amidst Economic Challenges
The report suggests that the MZ generation in major countries such as the United States and Canada is facing financial uncertainty due to rising inflation and unemployment rates. As a result, they are experiencing increased debt, lower credit scores, and higher delinquency rates, further exacerbating their financial woes. These economic challenges may be contributing to their unhealthy spending habits.
Domestic Trends Mirror Global Concerns
The situation in South Korea is no different. A 2021 report by Hana Institute of Finance revealed that domestic financial institutions targeted young professionals and the MZ generation with deferred payment services, aiming to lock them into their financial platforms. As delinquency rates among these younger demographics and vulnerable groups increased, the Financial Services Commission began regulating small deferred payments as loan products, similar to credit cards, starting from July 2023.
Potential Economic Implications
The report warns that if the financial health of the MZ generation, who are the key consumer demographic of the future, deteriorates beyond a certain level, it could lead to negative consequences such as slowed economic growth and increased government fiscal burdens. The report urges policymakers in each country to prepare proactive countermeasures to address this issue.
Conclusion
The global MZ generation's excessive spending habits and reliance on installment and deferred payments raise red flags about their financial well-being and the potential economic ramifications. As this demographic is poised to become the primary consumer force in the future, it is crucial for policymakers to address these concerns and develop strategies to promote financial stability and responsible spending among younger generations.
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