Social media and the economy: what Generation Z talks about when they talk about money

Girl Math

If a girl buys a €300 dress to wear to three weddings, she has actually spent €100 on wardrobe for each occasion. That's about the same as it would have cost to rent the dress. Even better, if you then resell it for €100, one of the weddings will have been free. This approach is called ‘Girl Math,’ a popular term on TikTok describing the humorous and indulgent way people justify their expenses.

The concept originated from a segment called ‘Girl Math’ in the New Zealand-based podcast ‘Fletch, Vaughan & Hayley.’ It humorously argues that paying in cash doesn't feel like spending money because it doesn't show up in the bank account, and buying a discounted item is like earning extra money because you didn't pay the full price. Experts caution that these beliefs can reinforce gender stereotypes by targeting young women's finances. Additionally, they may lead to negative financial consequences by encouraging excessive and unnecessary spending.

Bougie Broke

"Have you ever been broke, but no one believes you because you don't look like a broke person?” This question, posed by TikTok user Josh Jacobs in a viral video, popularized a term that describes the challenge of affording a luxurious lifestyle on a limited budget. It promotes cutting costs without sacrificing enjoyment.

The philosophy behind 'Bougie Broke' helps eliminate taboos and promotes greater transparency about finances. It encourages sharing money-saving tricks that were once frowned upon but are actually beneficial. For example, advocates suggest affordable home redecoration ideas like rearranging furniture, adding LED lights, or using adhesive wallpaper. This will give your home a new look, without having to spend a lot of money.

Loud budgeting

The taboo of discussing money is also being broken thanks to this viral TikTok term. Loud budgeting involves publicly sharing your financial details and expenses on social media.

It's a way to save effectively by becoming aware of your finances and working to reduce expenses. This behavior contrasts with the 'silent luxury' trend, which holds that discussing money is vulgar.

Doom Spending

In an increasingly complex and stressful world, spending money to cope with stress is becoming more common. This principle is advocated by the trend called Doom Spending, which has gained popularity on social media by promoting the idea of buying things to feel better.

The idea has resonated with young people who feel that saving for the future no longer makes sense. Many believe they won't achieve their financial goals, so they prefer to prioritize the present and spend on experiences or expensive items. However, unnecessary purchases for immediate gratification only lead to more debt that can lead to serious financial trouble.

Soft saving

"Put less money into your future, and use more of it in your present." This phrase sums up a trend, promoted on social media, that rejects the retirement savings philosophy of previous generations and focuses more on day-to-day living.

This financial behavior is driven by uncertainty about the future, which may initially appeal to younger people. However, neglecting long-term investment and savings poses a significant risk for this generation's future.

Cash stuffing

Cash stuffing, also known as the ‘envelope method,’ is a popular saving technique that gained traction on TikTok. It involves allocating specific amounts of cash into different colored envelopes for various categories such as clothing, transportation, school supplies, and leisure activities over a set period.

At the end of the designated period, any remaining funds in a category can be used to pay off debts, saved, or left for future expenses. This budgeting system offers a practical and visually clear way to track cash and expenses. On the downside, it means you have to keep a lot of cash at home.

Money dysmorphia

Money dysmorphia refers to the disorder of having a distorted view of one's financial situation or feeling insecure about it. One of the main drivers of this trend is the prevalence of images depicting influencers and celebrities living luxurious lifestyles, which are commonly found on social media.

This distorted perception of reality can lead individuals to engage in unhealthy financial behaviors, such as obsessively hoarding money out of fear of financial ruin or constantly feeling like they never have enough capital. In such cases, it's advisable to create a budget that provides a realistic view of one's financial situation or seek guidance from a professional financial advisor who can help plan personal finances objectively and effectively.