Why Is Gen Z Spending Like The World’s Ending? - Caleb Hammer
CChris Williamson
Credit/Debt/LoansBusiness NewsMental Health
Transcript
00:00:00Gen Z borrowers are carrying more credit card debt than millennials did at the same age,
00:00:04despite growing up with more financial information than any generation before them.
00:00:0998% of Gen Z say credit is important, but only 53% believe they have adequate access to it.
00:00:16And more than half of Americans have used buy now, pay later services.
00:00:2059% of those users were Gen Z.
00:00:23Oh yeah, that makes sense.
00:00:24Paying for Klarna, everything.
00:00:26It's a very Gen Z thing, tap to pay, super easy to use those.
00:00:30They're at every checkout for any concert you go to, pretty much anything you want to do.
00:00:35So that's not surprising.
00:00:38There is, I'm forgetting the term off the top of my head, but it's something like Doom Loop
00:00:42or something that a lot of Gen Z is kind of getting into where mostly because of the information out there
00:00:49and the algorithms they find themselves in, they think everything's going to be so bad forever.
00:00:53Why not just spend the money?
00:00:55Why not just put it on a credit card?
00:00:57So it makes sense.
00:00:59It seems to me like a big part of it is people being so unsure about the future
00:01:04and feeling like things are not going to get better that, well, fuck it.
00:01:09It's almost like the end of days.
00:01:11You know, there's this interesting story about during the Blitz in World War II in London,
00:01:14the amount of casual sex that people were having went through the roof,
00:01:17but lingerie sales stayed the same.
00:01:20And it was just people thought, look, I might die tomorrow.
00:01:24It doesn't really matter about how sexy I look at bed.
00:01:26Let's just get down to it.
00:01:27And it's kind of the financial equivalent of that.
00:01:29I'm just going to dump it all, which is this weird sort of a recursive system.
00:01:34It's this self-reinforcing mechanism that if you have negative information about the economy
00:01:39and about the quality of life for young people and about how hard you've got it
00:01:43and the fact that it's never going to get better,
00:01:44that encourages people to behave in a way that makes the thing true.
00:01:48Yeah, absolutely.
00:01:50It's kind of wild.
00:01:51And it's reality.
00:01:52It's a self-fulfilling prophecy that kind of gets not made out of nowhere.
00:01:57There are real material changes, but it's certainly worsened.
00:02:01And it's tracked.
00:02:01The University of Michigan does consumer sentiment survey.
00:02:05And I think they've done it since the 1980s.
00:02:07And right now is one of the three lowest we've ever had.
00:02:10I think it was right when COVID kicked off, the Great Recession, and now.
00:02:13But now is not even near Great Recession in any other indicator anywhere.
00:02:18It's not right when COVID kicked off, when everything shut down and no one knew what was going to happen.
00:02:23But consumer sentiment is basically at an all-time low.
00:02:26What do you think is going on?
00:02:27Well, we are stuck in those algorithms.
00:02:29You make money on negativity.
00:02:31Like even I have a documentary channel, more of a passion project, not much of a moneymaker called.
00:02:36It's cool.
00:02:36I like it.
00:02:37Oh, thanks.
00:02:37Called Front Page.
00:02:39Still getting the feel of it.
00:02:40But either way, I mean, the reality is the topics that are interesting to talk about are the more negative ones.
00:02:48Super positive content isn't as interesting to talk about for whatever reason.
00:02:51I'm not interested in learning about super positive.
00:02:53I'm not interested in talking about super positive.
00:02:55It doesn't feel urgent.
00:02:57No, exactly.
00:02:58So that's the information that's getting out there.
00:03:00That's the information that catches people's attention, keeps them in the algorithm.
00:03:04So I'm not surprised at all.
00:03:05I mean, nightly news, other than one fluff piece, is usually just negative, negative, negative.
00:03:09Even about the heat outside, it's like the apocalypse.
00:03:13It's always just negative.
00:03:14So it's not surprising.
00:03:16That's what drives our attention.
00:03:17It's what drives the algorithm.
00:03:19So consumer sentiment will, of course, be lower.
00:03:21Right.
00:03:21And that is impacting people's behavior, which actually brings that reality, brings that imagination into reality.
00:03:27It brings the news feed into your finances.
00:03:30Pretty interesting.
00:03:31Yeah, even though consumer spending is actually relatively healthy overall, like this isn't the best year in our economy, but it's also not even close to the worst year.
00:03:40Things are relatively healthy.
00:03:41There's some bad things like a cold out.
00:03:43There's the new graduates, bad job market for new graduates.
00:03:48And there's a lot of things at play there.
00:03:50There are a lot of things at play there.
00:03:51There's the nervousness of AI.
00:03:52There was the overhiring during the tech boom, during COVID.
00:03:56They've cut back there.
00:03:57And if there's no people leaving their jobs voluntarily, there's no jobs opening.
00:04:02And the people that are leaving their jobs in Texas are the one getting laid off, and they're not rehiring someone who's getting laid off.
00:04:06So those job openings that were there during the pandemic aren't there.
00:04:10So there's actual negative things happening right now, but it's not the overall economic situation.
00:04:16We're still having okay GDP growth post-inflation.
00:04:22Warren O'Ran, done, allegedly.
00:04:25We'll see.
00:04:26Is it?
00:04:26He signed the idea of peace or something yesterday, and so did Iran, the leader of Iran.
00:04:32Fuck me.
00:04:32That's like a guy with erectile dysfunction saying, I've signed the idea of erection today.
00:04:36Yeah.
00:04:36Signed the idea of a penis.
00:04:38I want to get you to react to a financial case here.
00:04:41Can we pull up that TikTok, Jared?
00:04:43I've had such a bad financial burden the last couple years.
00:04:45So after meeting with an attorney and doing lots of research, I realized that filing bankruptcy really isn't as bad as it's made out to be.
00:04:51And it was truly going to be my best bet.
00:04:52I decided to file Chapter 7, and truthfully, my consumer debt,
00:04:56really is not that bad.
00:04:58A lot of people have it a lot worse financially, but for me, $91,000 was just too much.
00:05:04It was uncomfortable, and I just wanted to get a fresh start.
00:05:08I moved to Texas directly after high school, and I made a lot of very irresponsible decisions financially, and really dug myself into a big hole of debt.
00:05:16So I decided, let's go ahead and file bankruptcy.
00:05:18Let's get myself a clean slate.
00:05:19That way I can stop stressing, and I can actually do better.
00:05:22Okay, just to give you a little breakdown of the debt that I do have that totals up to $91,300.
00:05:28I owe about $51,000 on the vehicle that I have.
00:05:30We did try selling that, trading it in, all that good stuff, but we have way too much negative equity to come out on top.
00:05:35I bought a motorcycle back in 2022.
00:05:37I thought that was a great idea.
00:05:39Fucking Americans.
00:05:40$50,000 still on that same thing.
00:05:42Tried selling it, not able to get what we owe out of it.
00:05:45I do own a camper, and I owe about $13,400 on that.
00:05:49She's retarded.
00:05:50Whatever I live out of that camper does, I can't afford a house.
00:05:54So I am keeping that since I do live in it.
00:05:57I have $2,200 worth of medical bills that I had no idea were in collections, and then I have $12,000 worth of student loans.
00:06:04However, those do not get forgiven with bankruptcy, so I will still continue that payment.
00:06:08And then I have about $7,700 worth of credit card debt, all coming into a grand total of $91,300.
00:06:15First of all, okay, yes, it is harder to get into a home now.
00:06:18Yes, a large sum payment is difficult to get to.
00:06:21Interest is not great on a house.
00:06:23How in the world does she think she's possibly, possibly, going to, sorry, I don't mean to screen you.
00:06:28You're not a guest on my show.
00:06:29Why does she think, in what world does she think she is ever going to get to home ownership if she's getting camper, motorcycle, and a $50,000 car?
00:06:38$50,000 car when she's moving to a brand new state.
00:06:42This is so American.
00:06:44We are so debt brainbroken.
00:06:46And she's actually right.
00:06:47I mean, bankruptcy is actually not that hard, not that brutal, a little expensive, but it's really not the worst.
00:06:54It fucks your credit for a bit, and it's not a good learning lesson.
00:06:57People usually end up in the same situation they are without changing their behavior before going through bankruptcy.
00:07:01But, she is right on that, but how did she ever expect?
00:07:05She can't get sympathy of not buying a house if she's getting a camper, motorcycle, and car, of which minimum payments on the motorcycle and car are likely over $1,000 together.
00:07:16Like, $1,000 going against anyone's income, unless you're, like, in the top 1%, is going to aggressively prevent you from saving anything.
00:07:23Remember, she can get an FHA loan on her first house.
00:07:26She can get, what is that, as low as 1.5%, something like that, down on your first house?
00:07:31How would she, how would she surprise?
00:07:34You can't get anywhere.
00:07:36And that also is really stupid, getting a trailer instead of renting an apartment, because she's getting debt on a depreciating asset.
00:07:43It's almost even worse, because an expense could pop up, have to get new tires.
00:07:48She has to pay rent anyway, likely to park somewhere and get the utilities plugged in.
00:07:53No.
00:07:54She is America, summed up.
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00:09:00Congratulations!
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