Millennial Money: Beating the treat yo-self mentality

Tuesday, 10 July 2018

On holiday mode you can end up spending more than you planned.

OPINION: I'm experiencing severe buyer's remorse. After spending an unnecessary amount on an ill-conceived purchase all with the well-intentioned attempt to treat myself, I regret all of it.

On a recent trip abroad I bought an expensive handbag that I didn't need, or could really afford, but I was in holiday-mode and looking to spend on something and all I really needed was a push telling me why I had to have that bag.

That push was a marketing ploy. The handbag brand's tagline of being every woman's first grown-up handbag.

Knowing full-well I was buying into a multibillion dollar brand's marketing strategy, why did I still do it?

Millennial, Anuja Nadkarni thought rewarding herself with a big impulse buy would make her feel happy but left her regretting her purchase.

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The 'treat your-self' mentality, which throws all reasonable logic and control for spending out the window, has been growing among my generation.

We know as employment has risen post-global financial crisis financial crisis, wages haven't risen with them. Kiwis are working harder but not getting paid for it, economist Shamubeel Eaqub says.

Financial guru Hannah McQueen says make treating yourself the goal, rather than spending on a whim, to avoid buyer's remorse and stay on track with your saving plan.

Auckland University marketing professor Carlos Diaz Ruiz said the traditional symbols of wealth or modernity had become unaffordable and changed how the millennial generation spent their money.

'The precariousness of [millennials'] jobs and lack of access to traditional symbols of middle class – like the deposit for a home or expensive car – you prefer to have different symbols that shows who you are,' Diaz Ruiz said.

'It's the mentality that I can't afford a house so I'll continue to buy super expensive organic coffee, or a nice face cream, because I deserve it.'

Well, it's no surprise then that millennials and now generation Z (born after 1995) have become the target market for the big designer labels and are driving luxury sales growth.

After making a conscious change in its marketing strategy to appeal to millennials, last year half of Gucci's revenue came from millennials.

According to Deloitte's recent luxury market report millennials and generation Z will represent almost half of the overall luxury goods market by 2025, compared with around 30 per cent in 2016.

Financial advisor Hannah McQueen said while treating yourself could seem like a healthy thing to do, the concern lies in falling in debt before realising you should save for the long term.

'There's a generation that is financially aimless because the old goals feel impossible to achieve, so as a result they spend more than they should,' McQueen said.

'Not only are people treating themselves, they're treating themselves on credit.

'You treat yourself until you feel uncomfortable. You treat yourself on sugar until you feel sick and people don't stop until they've got too much debt or they literally feel like they don't have any control and that's way too late to be stopping.'

So what's the best way to avoid going down the rabbit hole?

Having a reason to save, McQueen reckons.

'Make saving up for the handbag or new shoes a goal.

'It's starting with the little things until we make them bigger. For me, unless my goal is going to excite me then I'm going to be distracted by the impulse handbag purchase,' she said.

So working towards 'treating myself' as a goal, rather than doing it on a whim could be the answer to buyer's remorse and more sustainable saving.

While that may be easier said than done, the white dustbag my handbag now sits in will certainly serve as a reminder to stay on track with my spending habits.