Generation Z is embracing “funflation” more than any other generation, as they are planning to spend more on travel and entertainment than millennials, Gen Xers, and baby boomers. This trend is supported by a Bankrate survey that found that Americans across all generations are more willing to spend on fun activities like traveling, dining out, and attending live entertainment events. In fact, 27% of Americans are willing to take on debt for travel this year, while 14% would do the same for dining out, and 13% for live entertainment. Additionally, 38% of Americans would go into debt for at least one fun purchase this year.
Young adults in Generation Z, born between 1997 and 2012, are particularly eager to make up for lost time during the pandemic and are willing to spend more on fun than older generations. For example, 44% of Gen Zers are planning to spend more on traveling this year compared to 2023, compared to 37% of millennials, 20% of Gen Xers, and 24% of boomers. The trend of valuing experiences and prioritizing fun activities has accelerated, driven by a “you only live once” mentality. While this can lead to enjoying life in the moment, financial experts caution against taking on credit card debt, especially given the record-high average interest rate of 20.75%.
To mitigate the risks of accumulating credit card debt, experts recommend setting a specific entertainment budget, tapping into unused rewards like credit card points and gift cards, and starting to save money from each paycheck to avoid overspending on future events. Gen Zers and millennials are leading the way in spending on dining out and live entertainment, with a higher percentage of these younger generations willing to take on debt for these activities compared to Gen Xers and boomers. Specifically, 39% of Gen Zers expect to spend more on dining out this year, and 44% expect to spend more on live entertainment compared to last year.
It is essential for individuals to balance the desire for fun activities with financial responsibility, especially when it comes to using credit to fund leisure activities. While it is understandable to want to enjoy life and make up for lost time, carrying credit card debt can lead to long-term financial consequences. By setting a budget, utilizing rewards, and saving money in advance, individuals can enjoy fun activities without the risk of accumulating high-interest debt. As the economy continues to recover from the pandemic, it is important for people of all generations to prioritize financial well-being while also indulging in enjoyable experiences.
