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By P&N Bank General Manager, Angela Newland

I often feel for Gen Z when I observe the financial pressure people aged 12 to 27 are under today.

The current macro-economic factors make it near impossible for this generation to aspire to owning property, let alone be in a position to purchase and own their own home. Record property prices and home loan deposit requirements, together with a cost-of-living crisis, are making the home ownership dream feel not only out of reach for this generation, but unattainable.

And yet despite the generations before them witnessing and experiencing today’s cost-of-living barriers in their own right, we tend to classify Gen Z as a more frivolous generation. A generation who only have themselves and their luxury purchasing habits to blame for not being able to invest in property.

An example of this is the Bain & Co report from 2023, which named Gen Z as having “a more precocious attitude toward luxury” than any other and predicted that by 2030, Gen Z and Gen Alpha (those born after 2010) will account for 25-30 per cent of luxury market purchases. In this generation, people have started buying luxury bags and the like three years before the average age of any previous generation.

But have we stopped to consider why?

Gen Z receives more messaging than ever before about what they “need” in their lives. While my generation would pass the same billboard on the bus route to school and home each day, today’s teens carry around smart phones and scroll through countless reels from influencers and luxury clothing brands, seeing those they aspire to be like on luxury holidays and living in their luxury homes.

To give you a small insight into the influence social media is having on the spending habits of Gen Z, search #TikTokmademebuyit on the platform to see the eight billion views for this hashtag.

No generation before Gen Z has been under the same kind of pressure in terms of the save versus spend culture.

A Gen Xer myself, I was born at a time when the average house cost in Australia was between $17,500 and $25,000. Now, as General Manager of a WA bank, I speak to customers who are looking to secure their first home loan to buy a property, which in 2024 costs $600,000 on average in the Perth metropolitan area.

In fact, one of my team has been saving for a home with her partner for a number of years. While they still intend to purchase a property in the future, they’ve made the decision to book the holiday they had been putting off to focus on saving for a deposit, because they know it’s going to take them much longer than planned and they don’t want to miss out on life experiences.

At the end of the day, we can’t compare the generations or their attitudes to spending versus saving, because it would be like comparing apples and oranges.

Instead of encouraging a culture war on spending between generations, we need to establish new ways of supporting younger generations with financial wellness and sound money strategies, and developing their financial knowledge, to assist in alleviating the societal and economic pressures they are experiencing.

My top three ideas to support bridging the generational save V spend gap:

  1. Talk about money. By opening the dialogue and discussing our finances, we can break down the barriers that can make money a taboo subject. The more we talk about it, the more we learn.
  2. Be open to trying new things. At the end of the day, things will never stay the same. The digital age has provided us with so many new ways of budgeting, saving, and spending, so it’s important to build up the confidence to give things a go and see what works for you.
  3. Share your wisdom – no matter your age. The great thing about life is we’re always learning. By sharing what has worked for you in the past, things you may have done differently, or hearing how others are managing their money, you can discover great new financial empowerment tips and tools to get ahead and prevent yourself or others making the same mistakes.