Why do young people "waste" so much money?

There is often a debate around whether the younger generation can’t buy a house because house prices have massively outstripped wages, or because young people “waste” too much money. The second problem is real, but it’s still not young people’s fault.

House prices have doubled relative to wages, and the average deposit is now above £60,000. So saving £2,000 a year by avoiding fancy coffees and avocado toast would still take you 30 years to save up.

But we have also built a society that has significantly reduced what economists call the “pain of paying”.

We created a society with cheap and easy consumer credit: credit cards, payday loans, buy-now-pay-later, and reduced friction in spending: Apple Pay/Google Pay, pay with your smart watch, cashless shops, and we moved everything into a monthly subscription where you either have all of the music or none of the music and no option to decide “I won’t buy a new record this month because cash is low”.

So when someone gives in, that isn’t weakness. It’s a system doing exactly what it was designed to do.