Vibe-Budgeting Becomes a Gen Z Financial Trend

Young Americans are shifting their budgets not because their finances are that bad, but because the headlines make it seem like the economy overall is that bad — a new phenomenon known as “vibe-based budgeting.”

Why It Hits: One thing that’s for sure is that there’s a lot of uncertainty in the economy right now, both in the macro sense and in our personal finances. Vibe-based budgeting is simply a reflection of how people are trying to cope with a constantly shifting financial outlook.

Behind the Budget: A new report by Credit Karma puts some numbers to the vibes.

• 44% of Americans are now doing vibe-based budgeting — “adjusting their spending and financial habits based on ‘how the economy feels,’” per Fast Company.
• The trend is highest among millennials (57%) and Gen Zers (56%).
• 48% of Americans say they’ve started changing their budgets simply because the media coverage around the changing economy has painted a dire picture. That’s made them “second-guess” if they’re okay.
• 45% of those concerned about the economy have cut back on nonessential spending (such as eating out and entertainment), while 38% haven’t taken out new loans or accrued more debt.

The Future: All the vibe-based budgeting is mostly due to the fact that 44% of Americans believe that prices are “climbing rapidly,” and 34% believe their own finances are unstable. Ironically, 51% reported having a positive monthly cash flow, and 72% reported that their finances had not taken a negative turn over the past six months. 38% even expect their finances to be more optimistic in a year.

That is, unless you are one of the tens of thousands of people who have recently been laid off or faced salary cuts. Then, yeah, the financial picture isn’t so rosy.

Prediction: Expect brands to start marketing their products as a balm from the bad vibes — discounts, savings, and perks galore.