SEOUL, September 22 (AJP) - Once a week, a 28-year-old nurse working at a small hospital in central Seoul walks into a gift shop in Jongno-gu and buys herself something small.
It has become a ritual since she changed jobs two years ago. She does not drink or have particularly expensive hobbies. After rent, student loan payments, food, transportation and her phone bill, she says there is little left to save.
The life she once imagined for 28 looked very different.
“When I moved from North Gyeongsang Province to Seoul for college 10 years ago, I thought that by my age, I would have a small home of my own in Seoul,” she told AJP.
Her first paycheck put that expectation out of reach.
“When I graduated from college, got a job at a hospital and received my first salary, I realized I probably wouldn’t be able to buy a home in Seoul before I became a grandmother,” she said.
So she buys small luxuries, spending about 100,000 won ($73.6) a month at shops like the one in Jongno-gu. A home remains a distant prospect. A small gift is something she can give herself now.
“If I lived without even giving myself this much of a present, I think life would be too sad,” she said.
Across South Korea and the United States, young consumers facing expensive housing and uncertain employment are delaying milestones such as homeownership, marriage and buying a car. Yet they continue to spend on more attainable pleasures: coffee, desserts, cosmetics, jewelry and capsule toys.
The pattern has acquired a name in the United States: the “little treat economy.”
Bank of America Institute used the term in its August analysis of Gen Z spending. Its transaction data showed that the generation had the lowest savings-to-spending ratio of those tracked, yet spending remained resilient in discretionary categories including beauty, jewelry, coffee and travel.
The bank said the pattern suggested younger consumers were prioritizing products and experiences offering immediate gratification.
Gen Z’s median savings-to-spending ratio was just under 0.5. Yet its jewelry spending was nearly 11 percent higher in June than a year earlier, while travel spending rose 8.5 percent.
Young consumers are hardly oblivious to their financial circumstances.
A Bank of America survey conducted by Ipsos in February found that 42 percent of American Gen Z adults aged 18 to 29 were living paycheck to paycheck. Nearly half, 49 percent, identified the high cost of living as a major obstacle to financial success, while almost 30 percent cited housing and rent.
Forty percent had cut back on eating out, 24 percent had skipped events with friends and 16 percent had picked up side work.
Money was reshaping bigger decisions, too. Twenty-four percent said their finances had caused them to delay moving a romantic relationship forward. Fifty-one percent reported spending nothing on dates in a typical month.
Even so, 92 percent said they still bought themselves small treats, and 52 percent did so at least weekly.
The appetite for those purchases did not mean they had abandoned saving. Asked what they would do with an extra $300 a month, 54 percent said they would save it, a higher share than among millennials, Gen X or baby boomers.
The responses suggest that financial restraint and small indulgences can coexist. Young adults may cut back on social outings and postpone larger commitments while protecting a modest purchase that makes the week more bearable.
South Korea has no comparable measure of a “little treat economy,” but changes in its shopping districts offer signs of demand for inexpensive entertainment.
At the end of June, the country had 3,996 businesses classified as toy stores, up 20.3 percent from 3,323 a year earlier, according to National Tax Service data. The agency linked much of the growth to the spread of collectible figure stores and gacha shops, where vending machines dispense toys in capsules.
Over the same period, the number of beer pubs fell 9.1 percent nationwide, while small drinking establishments declined 9.2 percent. The figures do not establish that spending has shifted directly from alcohol to toys, but they point to a changing retail landscape.
In Seoul’s Mapo-gu, home to the Hongdae shopping and nightlife area popular with young people, toy stores increased from 49 to 70 in a year, a 42.9 percent rise.
A turn at a capsule-toy machine generally costs between 2,000 and 7,000 won. Customers do not know exactly which character they will receive until the capsule drops.
For a few thousand won, the purchase offers anticipation and an immediate reward against a backdrop of less certain prospects. South Korea’s youth unemployment rate reached 5.4 percent in August.
Small indulgences during difficult times are hardly new. The decades-old “lipstick effect” describes consumers continuing to buy relatively inexpensive luxuries while cutting back on major purchases.
Beauty sales offer one indication of that resilience. L’Oréal reported adjusted like-for-like sales growth of 6.7 percent in the first quarter, its fastest quarterly growth in two years. North American sales rose 7.6 percent and European sales increased 5.5 percent.
Such spending has also long supplied an easy explanation for why young adults struggle to build wealth.
“A decade ago, avocado toast was blamed for low homeownership and less financial well-being among young adults. Today it may be fancy coffees or desserts,” Emily Rauscher, a professor of sociology at Brown University, told AJP.
Rauscher rejects the idea that small discretionary purchases explain the broader problem.
“But the real reason is structural,” she said. “The economy is not providing opportunities that used to be available to young adults.”
Traditional markers of adulthood retain their economic and social importance, said Rauscher, whose research focuses on inequality and demography. Young adults still feel pressure to secure homes and stable careers, even as those goals become harder to reach.
The distance between those expectations and what they can afford can give a small purchase significance beyond its price.
“Discretionary purchases could be seen as a burst of economic independence,” Rauscher said. “If economic independence is beyond the reach of most young people, a brief feeling of that independence may be well worth the price of a treat.”
The relief, however, can wear off long before the financial pressure does.
“Unfortunately, a brief indulgence is only temporary and cannot address the underlying issue,” Rauscher said. “The treats could therefore become repetitive or even addictive.”
For the nurse in Jongno-gu, the weekly gift does not bring a home of her own any closer. It makes the life she can afford a little easier to live.
AJP Takeaways
- Young adults in South Korea and the United States are delaying costly milestones while preserving small, affordable pleasures.
- Bank of America data show Gen Z combines financial restraint with regular spending on treats such as coffee, beauty products and jewelry.
- Brown University sociologist Emily Rauscher says structural economic pressures, not small indulgences, are the deeper barrier to young adults building wealth.
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