Why Gen Z isn’t spending

So a lot of us have heard of the idea of Dry January. It's a new trend, and basically what people would do was decide not to drink alcohol for the entirety of the month of January. But some people are taking it even further, and a lot of these folks are Gen Z. They're doing a thing called No Buy 2025, and No Buy 2025 works like this: you go through and you decide that you're not going to buy anything non-essential. Any junk, anything that you maybe don't essentially need, uh, you're going to totally go about the year around minimalism. And, uh, you're going to try to buy as little as possible, or perhaps even nothing if that's possible as a consumer. And look, with two-thirds of our economy driven by the consumer and those people buying things, and a lot of those purchases being done by young people, Gen Z especially, in their teens and 20s. This potentially has big impacts on not only our individual businesses, but our economy as a whole as well. So that's what this video is about. Let's dig into it. Stay tuned. Hi, my name is Michael Girdley. I am a business nerd. I like to go for walks and talk and teach about business topics. If you like that kind of stuff, please subscribe. There will be more where that came from. And also subscribe to my newsletter. I will spam you with business knowledge. once or twice a week. Uh, link is in my profile page. Oh, and that's free too. Okay, so this No Buy 2025, pledging to buy as little if not nothing, uh, in the year 2025, is mostly being driven by Gen Z. And Gen Z, uh, is folks who were born in the '90s, mid-'90s, until kind of 2010, 2012, depending on who you ask. So right now these folks are anywhere from kind of 14 to, let's say, 30 years old. And they're classic Gen Z folks. And this is the first generation that's grown up with social media and the internet being pervasive, right? If you think about my generation, Gen X, by the way, we're old now, I'm 50. The idea of a cell phone is just kind of a foreign concept. And the idea of Facebook or social media or Instagram, heck, those things weren't even like a twinkle in the eye of Mark Zuckerberg's parents. When I was young. But anyway, these Gen Z folks have grown up with social media, and that has caused them to do one thing, which is to be, well, depressed as hell. And as such, Gen Z has grown up to be the most depressed of any generation, uh, in history. Uh, 42% of them have been diagnosed with a mental illness. Like, that's kind of— that's a lot of people. Um, but if you ask yourself why, well, look, If, uh, the whole world of ubiquitous kind of cell phones and TV and media and movies and radio, uh, and everybody online kind of screaming negative things to try to get you to stick your eyeballs on them, uh, eventually that stuff gets to you and it has definitely gotten to Gen Z. So fast forward, these young people who are Gen Z now grow up basically through a time of great abundance through the early 2010s, right? They see people getting rich. They see the richer getting richer faster than they are since they're young people. And it all goes pretty well until it all comes to a grinding halt in 2020 with the COVID pandemic. And out of nowhere, the music stops at the party, right? We've seen one of the greatest runs of overall wealth creation and good times, uh, in the history of the world. And COVID brings it all to a grinding halt. And if you think about it, if you're a teenager or a person in their early 20s going through that experience, it teaches you a pretty kind of interesting lesson compared to, well, what you've just witnessed over the early part of your life. And COVID teaches these young people that, well, physical things, they have a fleeting level of utility. You can look up and one day a virus can come out of nowhere and basically all that stuff that you owned or cars you can use or products out in the world, well, man, They're just not that useful if you can't leave your house to go take advantage of them. And COVID brought a second sucker punch for young people, which was massive inflation. And look, the government numbers are 8% is kind of where we peaked out for year-over-year inflation in terms of, well, what all the cash that was injected into the system did to prices. But here's the reality. Inflation is not a, like, mono thing. It doesn't affect everyone equally. It affects young people and the poor much, much worse. Than it affects people who are, well, well off. And a lot of that COVID money that came in went straight into, well, hard assets, things like homes, and such that the prices of homes, of which Gen Z was just starting to get an age where they were ready to buy one, suddenly became astronomical. While in 2023, we had a number where the median price for a home, uh, in the US was $408,000. Uh, for a lot of young people, that might as well well, put the house on Mars for the lack of affordability. Then you combine that with, well, rising debt that a lot of these young folks are feeling. I mean, the numbers lately are that the average person is graduating with $50,000 in college debt just from having to go, well, finish their education. And you throw into that another factor for young people, which is, well, the job market kind of sucks ass for them. Like the entry-level job idea is really hard to come by compared to where it was just a few years before the pandemic. And so you put all this together, right? You have the most depressed generation ever who's entering into a world where frankly the deck seems stacked against them with housing prices, student debt, and frankly just high cost of everything. And that's how we end up where we are today, which is Gen Z feeling like, well, it's all kind of hopeless. And look, it's made me sad. Like, I talk to a lot of young Gen Zs, well, teenagers, because I have teenage kids, I get exposed to them a lot. A lot of them will say things like, It's all hopeless and they don't feel like there's a real future. And some even take it further. They've been listening to the things on the media about how the planet's going to end due to climate change and stuff like that. Like they truly, many of them have thrown up their hands and think that the world's going to end pretty soon. It's— it's sad. Well, at least for me as an old person. And it's interesting if you look at how strongly the environmental movement has pushed the idea of saving the planet. It's almost pushed it too far to the point where a lot of people, young people especially, feel guilty about buying and consuming anything. So they're just avoiding a lot of the things that are just part of healthy life, including living, buying homes, getting married, and having kids. But the good news— there are parallels always in history. History doesn't repeat, but it always echoes. And there's a reminiscent time of all this, which is back in the 1960s when young baby boomers did similar things where they tuned in, checked out, took LSD and became hippies and moved in the communes, which would actually sound kind of fun, but also terrible. But anyway, a lot of those people went through that process and they stayed there, right? They eventually checked out of society and a few of them stayed that kind of hippie lifestyle forever. But the majority of them, well, they eventually— those baby boomers came back from that experience and checked into life and eventually did start to consume and be part of society. But I think all this is symptomatic of a change going on in the economy. And the results of a lot of the stuff we've seen building over the past 20 years, you know, that ran into the COVID pandemic, which is a lot of these folks don't have money for non-essential items. My friends that are in the toy business, for example, selling toys to consumers and families, they've seen a massive drop-off in people just basically buying discretionary stuff. Discretionary spending is way down for them. You're seeing people save their money just to spend that on essentials because frankly, the price of eggs is $7. It's pretty pricey. Maybe we should have oatmeal instead. That's what I do. And so I think that's where if you're selling things that are essential or must-haves to consumers, you can feel pretty good about the current situation. If they have to buy auto insurance or they have to buy milk and eggs from you, those are good businesses to be in right now. But if you're selling something that's a discretion or a non-essential, man, things are going to be tough for a while until we get back to normal. If there ever is a normal again. And is this bad or good? I don't really know. All I know is in business, life, culture, everybody, stuff always appears to be changing. And I think that's what makes it so darn interesting. You have to spend your time figuring out what's happening and then hope sometimes fortune smiles upon you and you get lucky and, you know, they come and buy your stuff. But in the meantime, you just grind away and do your best. That's what business is about.