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However, Gen Z seems to have taken thisfinancial planningprinciple to heart even more.
This trend of Gen Z splurging more than millennials holds across income levels.
High-income individuals are more likely to splurge, but even most low-income Gen Z treat themselves.
Their top five splurge categories are:
Whats driving these spending patterns between Gen Z vs. millennials?
One possibility could be thatparenting plays a major role.
Does Parenting Make a Difference?
Gen Zers were largely raised by Gen Xers, and millennials by baby boomers.
Per the McKinsey study, 35% of Gen X plan to splurge vs. just 19% of boomers.
So are baby boomers passing down more lessons on self-control with spending?
Many millennials started their careers around the Great Recession and COVID came as they started families and bought houses.
Social media, where word of mouth and recommendations are common, has a big impact on Gen Z.
Another interesting take here is that people often form money habits by age seven, Price said.
Parenting has a big impact on spending habits.
How To Approach Splurging
Start the conversation early to instill better money habits in your kids.
Kids as young as three or four years old begin learning to be responsible with money.
Kids learn from real-life experience so give your kids experiences with money and earning money on their own.
Show them the power of investing at a young age.
Promoting generosity and setting clear boundaries further enables children withessential financial skillsand a responsible mindset.
Parents as well as those currently examining their spending habits may want to evaluate their relationship with splurging.
When done with a plan, splurging can be an amazing thing.
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