09/22/2026
Some younger consumers are spending on luxury items even as major milestones feel harder to reach.
An article from The Economic Times explores whether Gen Z spending on items like expensive smartphones, sneakers, and travel may reflect a broader version of the “Lipstick Effect.” 📱👟✈️
The Lipstick Effect describes a pattern where consumers buy smaller luxuries during periods of financial uncertainty, especially when larger purchases feel out of reach.
In this case, the larger purchase is often homeownership.
As housing costs rise, some younger adults may feel that saving for property is increasingly unrealistic. Instead, they may choose purchases that offer more immediate enjoyment, identity, or a sense of progress.
That does not mean every purchase is financially harmful. But it does show how affordability pressures can shape behavior, priorities, and trade-offs.
The broader takeaway: spending decisions often reflect more than impulse. They can also reflect economic realities, delayed milestones, and the ways people look for meaning when traditional markers of success feel further away.
Source:
Financial advisor Prem Soni says Gen Zs spending on Rs 15,000 sneakers, expensive iPhones and foreign holidays may reflect the “Lipstick Effect.” He argues that with homes costing around Rs 3 crore and long-term EMIs, traditional milestones feel increasingly unreachable for young earners. Instea...
