For many young people working today, the concept of “wealth” has changed. For them it’s not about purchasing their first home or having the latest automobile – they want to experience life and collect memories that will last forever. Whether attending concerts, travelling, visiting wellness retreats or exploring a creative interest, the youth today are choosing to use their money to fund the best experiences possible.
This generation is moving away from evaluating their success based on how much they save and what they own, toward measuring success by their freedom, their happiness and personal growth. The act of “experiential spending,” therefore, does not reflect an irresponsible attitude toward money, but rather a new definition of how one can lead a fulfilling and meaningful life when money itself has less importance.
From ownership to participation
A person’s wealth is no longer defined by material possessions but rather by how one lives life fully. For many young people earning money, the excitement and high feeling of a trip with friends, a music festival, or a wellness weekend can give them greater satisfaction and happiness than the most up-to-date smart phone, or car upgrade. This is because experiences are remembered for a much longer time than items you own.
For example, a 27 year old Marketing Executive chooses to spend ₹40,000 a year on travelling and not towards paying EMIs for a car. She gets to see new places, get new views, and create stories for herself; she doesn’t get these benefits through accumulating. The worth of an experience is based upon being a part of it.
Happiness as the real ROI
Younger generations view returns on their money through a lens of ‘joy’ rather than rupees. A concert, weekend getaway or online creative workshop costing ₹10,000 may appear expensive but it is now viewed by the younger generation as a form of investing in their own happiness and personal development; a return that adds value over time from an emotional perspective and not financial.
Today many young people earn money and choose to use this income to purchase items, take classes or participate in activities that bring them a sense of fulfilment. They are not purchasing these items to further enhance their careers but as a form of investing in their passions; an alternative type of asset which will create increased confidence, curiosity and long term emotional well-being.
Emphasizing freedom over ownership
In the past, securing one’s finances through adulthood meant owning something tangible (e.g., a home or automobile). In today’s economy, many younger earners see financial freedom as being able to be free of those long-term obligations, so they can continue to have more experiences, but with fewer long term financial commitments.
For example, a working professional in Bengaluru could decide to rent their residence instead of a 20 year mortgage, and use some of that money for yearly travel adventures, or startup ventures.
The rise of social wealth: Experience over possession
Experience has developed into the new social wealth; experiences are now allowing us to develop friendships, social networks and common experiences that physical possessions cannot provide. Whether we participate in a music festival, group hiking trip or weekend workshop, experiences allow us to connect with other like-minded people, creating ties that go well beyond our professional relationships.
This growing need to connect is reflected in the number of local events, cultural gatherings and creative retreats taking place across cities. The value of an experience is often not just the act of participation in the event, but also the sense of belonging and community that develops from participating in an event — much long lasting than any material item purchased.
Younger earners are spending smarter
While many think younger earners have a “spend first” mentality; actually many are becoming much more mindful about where they spend money. Many earners plan out how much they will spend on fun activities and put that amount into a savings account. In essence, they are treating spending money for fun as goals to be achieved as opposed to indulgent purchases. The goal is to find a way to enjoy the present while still being fiscally responsible.
A prime example would be saving a small percentage of their monthly earnings every month toward a vacation, festival or wellness retreat. Budgeting for fun this way helps them know that spending money for enjoyment does not mean sacrificing long term financial security. Young people can live life to the fullest and make smart plans at the same time.
Defining success today in modern times
In today’s world, success has evolved from a standard list of accomplishments (buying a house, having a car, and retirement) and now is defined as a state of fulfillment, balance, and freedom. For many young workers, experiences such as traveling, learning, and volunteering to improve their mental health, are more valuable than obtaining a tangible item or goal.
A 29-year-old IT professional who chooses a six-month sabbatical to travel or volunteer abroad might be questioned by older relatives, but for him, that time is an investment in clarity and creativity. In this new definition, wealth is measured not in possessions, but in peace of mind.
Experience spending is an example of how people are wanting to live well, as opposed to simply making a good income. Rather than focusing on acquiring possessions, people are now looking for experiences which create meaning, memory and personal development opportunities.
This is not a rejection of fiscal responsibility; it is a redefinition of what wealth can be used for beyond the bottom line.
