In recent years, there has been a noticeable shift in the spending habits of young Koreans, with many choosing to cut back on dining out and unnecessary expenses. This change in behavior is driven by a combination of factors, including high inflation, low income growth rates, and a growing interest in investing for the future.
One young Korean, Choi, exemplifies this trend by avoiding eating out when not scheduled to do so. She sees having two appointments in a week as a red flag and adjusts her spending accordingly. This mindset reflects a broader shift towards a more frugal lifestyle among young people in South Korea.
The dominant trend over the past decade has been to prioritize immediate happiness over saving for the future, a mindset encapsulated by the popular phrase „YOLO“ (you only live once). This trend was particularly prevalent among single-person households, who focused on enjoying life in the present rather than worrying about the future.
However, the economic landscape in South Korea has changed, with high inflation and stagnant income growth rates forcing many young people to reevaluate their spending habits. The concept of „YONO“ (you only need one) has emerged as a response to these challenges, encouraging individuals to reduce unnecessary expenses and focus on essential purchases.
Choi reflects on how societal attitudes towards spending have shifted, noting that personal investments and enjoyment are no longer as admired as they once were. While some may still enjoy luxury experiences like omakase dining, many young people now prefer to allocate their funds towards other priorities.
Data from South Korea’s NH NongHyup Bank supports this trend, showing a decrease in dining-out transactions among people in their twenties and thirties. Instead, there has been an increase in the consumption of convenience store foods and a decrease in spending at department stores and coffee shops.
The Federation of Korean Industries highlights the economic challenges faced by young people, citing job market difficulties and rising prices as key factors contributing to their perceived economic distress. This has led many to reevaluate their spending habits and prioritize investments over frivolous expenses.
Despite the shift towards a more frugal lifestyle, young Koreans are not cutting back on all aspects of their lives. NH NongHyup Bank notes that instead of owning material goods, many young people are choosing to spend on experiences such as sports or overseas travel. This demonstrates a shift towards valuing experiences over possessions.
Overall, the changing spending habits of young Koreans reflect a broader shift towards a more mindful and intentional approach to personal finances. By prioritizing essential purchases, reducing unnecessary expenses, and focusing on investments for the future, many young people are adapting to the economic challenges they face in today’s society.