Luxury broke: Living large on an empty wallet

THE HANOI TIMES — Step into a trendy cafe in Hanoi and the scene is unmistakable. A number of young people dressed in the latest fashion, sipping overpriced matches and boba, casually scrolling through the latest iPhone model.

Their Instagram feeds are a parade of luxurious weekend brunches at five-star hotels, designer bags, and spontaneous getaways. But beneath the glossy surface, the reality often tells a different story. Many of these young adults are living paycheck to paycheck, spending beyond their means just to project an air of affluence.

"Luxury broke" isn't just a fleeting trend. It's a lifestyle choice fueled by social pressure, access to credit, and changing definitions of success. In a world where experiences and possessions are flaunted online, many young people feel the need to keep up, even if their bank accounts say otherwise.

Financial surveys reveal a worrying pattern. A 2024 report by Anphabe found that 74% of Vietnamese workers believe their income is insufficient to cover basic expenses. Yet, paradoxically, social media statistics show that people with lower incomes are more likely to frequent cafes. This contradiction raises an important question: is this a reflection of financial mismanagement, or an escape from economic stress?

In the United States, research from Experian shows a similar trend. 63% of Gen Z and 59% of Millennials prefer to spend on experiences like travel and concerts rather than saving for retirement. The narrative is clear: financial security is being postponed in favor of instant gratification.

The ease of digital payments and credit options has made it effortless to spend money you don't have. Credit cards, installment plans, and "buy now, pay later" services encourage immediate purchases without considering the long-term consequences. What starts as a harmless indulgence quickly turns into a cycle of debt.

"I used to think, 'I'll just buy it now and pay later.' But before I knew it, I had accumulated more debt than I could handle," confessed Hoang Dung, 23. "I even borrowed money to go to a concert because I was afraid of missing out. It seemed like a good idea at the time, but after that, I had no idea how to cover my living expenses."

For many young people, financial decisions are driven more by emotion than logic. The fear of missing out (FOMO) is real. The rise of social media has created a new measure of personal success, not only in terms of career achievement but also in the form of material possessions and extravagant experiences.

Phan Hang, a fresh graduate, once followed the same path. "I always had the latest phone, and the trendiest outfits, and traveled whenever I had the chance. But then I realized I had nothing saved. I started cutting back, and within a year I managed to save two gold bars. It's not much, but it's a sign of progress."

Not everyone is willing to change, however. Nhat Linh, 22, sees herself caught between two mindsets. "I keep wondering if I should save or just enjoy life while I'm young. Part of me thinks I should be responsible, but another part says, 'You only live once. There is a visible gap between lifestyle and actual financial capability. Many young adults spend lavishly in social settings but live frugally when alone. A person may dine with friends in high-end restaurants, but live on instant noodles at home.

"I used to spend every cent I earned," admitted Nhat Phuong, 32. "At the end of the month, I would struggle just to afford my daily meals. If there was an emergency, I had to borrow money. That was my wake-up call. Now I always save money before I indulge."

Overspending is also evident in the dating culture. Hoang Nam observed, "Dating used to be about getting to know someone over a simple meal or a walk. Now it's about proving how much you can spend. A single date can cost millions just to impress someone."

Parents are equally baffled by this shift. Ngoc Ha, 53, expressed disbelief at her child’s shopping habits. “Every time there’s an event, they buy new clothes just to wear once. Once they’ve taken a picture of it, they consider it old. It’s incredibly wasteful, but they think it’s normal.”

This isn’t just about money. It’s about perception. Many young people tie their self-worth to how they present themselves online. Owning luxury goods and indulging in premium experiences have become social currency. The validation received from likes and comments often outweighs the reality of financial struggles.

But luxury spending provides momentary satisfaction. The thrill of a designer purchase fades, but the burden of financial instability remains. A five-star meal does not guarantee long-term security. A lavish vacation does not erase financial stress.

The best approach, I believe, is to strike a balance between spending wisely and leaving room for personal enjoyment. A smart financial plan should include both leisure and passions, but never at the expense of financial security.

Having an emergency fund ensures that unexpected situations don't turn into crises. After all, what's youth without a little indulgence? The key is to enjoy life without compromising stability.