01-Jun-2016 • Corporate
Close to half (45%) of Australians are making You Only Live Once (YOLO) purchases according to new research by industry super fund-owned bank ME.
YOLO splurges are those made in the heat of the moment with little thought for the consequences.
Of the 45% of Australians who said they make YOLO purchases from ‘time to time’, more than half (52%) said they spent $300 or more on their most recent YOLO purchase.
When asked to reflect on what prompted the YOLO purchases ‘self-indulgence’ was the main motivation (37%), followed by a ‘desire to be happy or other emotional reason’ (35%), or ‘low price, sale or great value’ (31%).
Interestingly, twice as many YOLO buyers ‘felt pleased’ about purchasing their most recent item than those who ‘felt guilty’ – 40% and 20% respectively – with holidays the most popular choice across the board (47%), followed by leisure and hobbies (37%) and clothes and shoes (35%).
Even though nearly half (48%) of YOLO spenders have toned down purchasing in the last five years, 29% are making ‘about the same’ as before and nearly a quarter (24%) are making more.
When it came to querying the means for funding the YOLO lifestyle nearly half (45%) of spenders said they purchased their last YOLO item on credit.
ME Head of Deposits and Transactional Banking, Nic Emery, said purchasing spontaneously on credit is fine as long as you pay off your balances each month.
“Reserve Bank figures show Australians owe $51.7 billion across 16.4 million credit card accounts,” Emery said.
“It’s important to ‘clear the credit card slate’ before monthly interest charges apply, or at least pay off more than the monthly minimum to avoid building up excessive debt.”
However, just 12% of YOLO purchasers went into debt as a result of their splurging habits, showing that many spenders are already using their credit card wisely to ease the YOLO-effect.
Similarly, many survey respondents managed their YOLO spending habits by cutting back on spending (23%) and delaying savings goals (17%).
Emery said: “The best thing to do if you’re a YOLO spender is to acknowledge that you’re likely to indulge and budget for it. And if you can’t afford it, set up controls that prevent you from shopping like leaving your wallet at home.”
Other findings:
• Women typically spent their YOLO dollars on clothes and shoes (46% of women compared to 19% of men).
• More YOLO spenders over 50 years of age splurged on travel compared to those under 30 (58% versus 26%, respectively).
• Despite apps and social media that would seem to encourage impulse buys, significantly more YOLO-related spending occurred in stores, with 57% doing so, compared to 43% on the web.