In recent years, there has been a noticeable shift in the spending habits of young Koreans, with many opting to cut back on dining out and unnecessary expenses. This change is attributed to a combination of factors, including high inflation rates, low income growth, 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 dining appointments in a week as a red flag and adjusts her spending accordingly. This mindset reflects a broader movement among young people in South Korea towards a more frugal lifestyle.
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). However, economic challenges such as high inflation rates have forced many to reevaluate their spending habits. As a result, the concept of „YONO“ (you only need one) has emerged, encouraging individuals to reduce unnecessary expenses and focus on essential purchases.
According to a study by South Korea’s NH NongHyup Bank, the number of dining-out transactions among people in their twenties and thirties decreased by nine percent in the first half of 2024 compared to the same period in 2023. In contrast, the consumption of convenience store foods increased by 21 percent, indicating a shift towards more cost-effective dining options.
The study also found a decrease in transactions at department stores and a decline in coffee consumption at popular chains like Starbucks. These changes are attributed to the impact of inflation on sectors where young people typically spend the most, leading to higher living costs for those with low incomes or preparing for employment.
Despite the trend towards frugality, young Koreans are not cutting back on all aspects of their lives. Many are choosing to invest their money in experiences such as sports or overseas travel rather than material possessions. This shift reflects a desire for meaningful experiences over material goods.
Overall, the changing spending habits of young Koreans reflect a broader economic reality characterized by high inflation rates and stagnant income growth. By embracing a more frugal lifestyle and prioritizing essential expenses, many are adapting to the challenges of the current economic climate while still seeking meaningful experiences and investments for the future.