Prodigality, thy name is Vietnamese youth

By Quang Huong   October 24, 2023 | 03:00 pm PT
Thai Vinh of HCMC had a VND50-million (US$2,033) credit card debt three years ago, and even contemplated borrowing from loan sharks or selling his belongings to repay it.

The 27-year-old used to spend a large part of his VND19 million monthly income eating at fancy restaurants three times a week, thinking nothing about paying VND1 million each time.

"So I often spent every bit of my monthly salary," he recalls.

He did not even think about saving money at the time as he considered spending it a payoff for his hard work, he says, and he would only pay the minimum due on the card and keep maxing it out.

Fortunately his girlfriend stepped in and limited his spending to VND5 million a month. She made him use the rest of his income to pay off his card debt, which he managed in five months.

Vinh is therefore a typical case of a young person suffering from the consequences of reckless spending, something that is becoming increasingly common, though.

According to a local money lending company, 26.6% of its clients are aged between 26 and 30.

Another large portion of its clientele are students, of whom 53% borrowed money to buy expensive items like iPhones, designer bags and cosmetics to be in with their social crowd.

Many young people in Vietnam borrow money to buy expensive items to be in with their social crowd. Photo illustration by Freepik

Many young people in Vietnam borrow money to buy expensive items to be in with their social crowd. Photo illustration by Freepik

Thanh Thao, 23, of HCMC, kicked the habit of profligate spending after having to borrow money from her parents many times, sometimes amounts as small as a few hundred thousand dong.

"There were months when there were unexpected events such as academic courses, health issues, parties, gifts for my friends, or vacations," she says. "Having to borrow from my parents on those occasions made me decide that I should start saving money."

Thao adds that most gen-Zers (people born after 1997) like to spend everything they earn, even when that prompts them to have no other choices than borrowing money from others, just like her.

"My friends would sometimes ask me why I spend too much money, but at the time I thought my expenses were normal," she says.

Analysts and executives at luxury fashion brands attribute young people’s temptation to spend money on expensive items to the popularity of social media where influencers frequently post photos of their posh lives. This causes many young people to admire and make them their role models, and emulate their lifestyle, they explain.

Vinh and Thao concur with this observation, saying their purchasing decisions were strongly influenced by what they saw on social media.

Thao says she would often visit places considered trendy on TikTok, whether amusement places or shopping malls. Vinh says he got to know most eateries he visited from that platform too.

Both were also hooked on uploading photos of themselves having a good time on social media. The more compliments they got from friends and associates for that, the more motivated they were to live in that manner, creating a vicious cycle.

Another reason for many young people’s willingness to splurge is the fact they do not have to support anyone else yet, often not even themselves since they mostly live with their parents.

"My parents said they did not need my financial support," Thao says. "So I just spent what I had."

Financial experts suggest a few things young people could do like waiting for a few days before purchasing something they like, switching from using credit cards to cash and keeping a record of monthly spending to shop economically.

Otherwise, they may have to regret later in life.

"I do regret not saving money in the past," Vinh says. "I would have had a lot of money to spend on bigger things now if I had saved."

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