Impulse spending and how young people are blowing their budgets

Impulse spending and how young people are blowing their budgets. Guest post by Fraser Stewart, Lyfeguard

Swipe, tap, spend

 
The allure of instant gratification is transforming how we manage our money. Impulse purchases are on the rise, fuelled by social media’s endless scroll and the convenience of digital payments. Brits now spend over £3 billion a month on these spontaneous buys – whether it’s late-night browsing, boredom on the commute, or dual-screening in the evenings, we have unprecedented access to anything we desire at the click of a button.

Young people, however, are particularly susceptible. As avid users of platforms like TikTok and Instagram, they’re bombarded with targeted ads, one-click purchases, and the constant temptation of carefully curated feeds. This seamless integration of shopping into their digital lives creates a perfect storm for impulsive spending. The ease of digital payments and buy-now-pay-later services further lowers the barriers, making it easier than ever to tap away hard-earned cash. But are these fleeting moments of pleasure worth the financial hangover?
 

A Financial Literacy Crisis in the Digital Age

 
Gen Z, the generation currently aged between 12 and 27, are the first generation to grow up in an era where the tools for both instant spending and instant gratification evolved in tandem. By the time the oldest among them reached adulthood, the iPhone had already transformed daily life. Just a few years later, Apple Pay further blurred the lines between desire and purchase, making spending as easy as a single tap.
 

 
Yet, even as these young people navigate the complexities of adolescence and early adulthood, personal finance education remains largely stagnant. While tech companies have transformed how we interact with the world, schools are failing to equip students with the financial literacy they desperately need to navigate their financial futures.

Concepts like saving, investing, and the power of compound interest remain shrouded in mystery, leaving many young people ill-prepared to manage their money in an ever-evolving financial world. This disconnect between technological advancement and financial education is creating a generation uniquely vulnerable to the allure of impulse spending and the potential pitfalls of easy credit.
 

The High Cost of “Low-Cost” Impulse Buys

 
Tech giants effortlessly paint vivid pictures: a thousand songs in your pocket, a world of information at your fingertips. But when it comes to fundamental financial concepts – the tools that empower us to build a secure future – the narrative gets lost. Instead of captivating stories, we’re left with jargon and complexity. This lack of clear communication has real consequences. The average Brit spends around £200 a month on impulse buys: amounts that quickly add up. For a 25-year-old, that’s £2,400 a year that could be working for them, not against them.

Imagine redirecting that £200 into a diversified investment portfolio with a modest 4% annualised return rate. By 40, they’d have over £49,000. By 50? Over £103,000 – a house deposit, early retirement fund, or financial safety net. Instead, that money often vanishes into a sea of forgotten impulse buys: fast fashion hauls gathering dust, last-minute concert tickets, or overpriced coffees offering fleeting joy. These figures are the difference between financial security and a lifetime of playing catch-up.
 

Empowering the Next Generation

 
Every generation grapples with its own financial challenges, and Gen Z is no exception. However, the unique convergence of a rapidly evolving technology and gaps in financial education has created a perfect storm for today’s young people.

We need a multi-faceted approach that harnesses the power of technology while addressing systemic shortcomings. First, financial education must become a non-negotiable part of the curriculum, woven into everyday learning from primary school onwards. Second, the financial industry must step up, designing transparent, user-friendly products that empower consumers rather than confuse them. Finally, robust regulations must ensure these products are accessible and fair to all, regardless of background.

We must leverage the digital landscape that young people inhabit, transforming it into a fertile ground for financial education. By meeting young people where they are – on their smartphones, in their social feeds, and in their everyday lives – we can make financial literacy not just accessible, but engaging, empowering, and even fun.

This is about ensuring that young people have the tools to navigate an increasingly complex financial landscape, to make informed decisions about their money, and to build a secure foundation for their future.