Gen Z's Financial Dilemma: Spending Freely Yet Feeling Guilty
Keith Correa sits in a South Bombay cafe, mentally calculating the damage. The bill will likely cross Rs 1,000. He is 23, recently started working, and can technically afford it. But that does not stop the familiar loop of thoughts. "Is it worth this much? Do I really need this? Am I overstepping?" he wonders.
"So much guilt," he admits. "If I see any expense for food or clothing, especially over Rs 1,000, I catch myself second-guessing. I can easily afford it twice over, but it is tough."
The Vicious Cycle of Treat, Regret, Repeat
This tension between wanting to live well now and fearing you are doing it all wrong defines Gen Z's financial life in India today. Many young earners spend more freely than previous generations on cafes, skincare, travel, and small daily comforts. Yet they carry persistent guilt, a nagging voice that asks: "Should I really be doing this?"
Ananya Bhardwaj, 27, spends most on cafes, convenience services, skincare, and clothes. She buys clothes during sales to curb emotional spending. "With cafes and convenience services, I generally feel a pang of guilt at having overspent from my day-to-day budget," she says.
She learned to hit pause. Letting items sit in her cart for a day or two helps her determine whether it is essential to feeling better or just a dopamine hit she is chasing.
Shruti Jain, 24, describes her spends as "little rewards" after completing tasks. "In those moments, it genuinely feels rewarding and well-earned." But impulsive shopping after exhausting days brings comfort followed by guilt.
"I'm still learning where the line is," she explains. "Comfort feels nurturing, but indulgence is when I realise I was trying to fill an emotional gap rather than addressing what I was actually feeling."
Why Does Guilt Follow Every Purchase?
Snehashish Das, a quantitative analyst and financial planning expert, says guilt rarely comes from the spending itself. "It comes from ambiguity. When people do not know whether their financial foundations are strong, every discretionary expense feels like a potential mistake."
Gen Z grew up amid constant messaging about hustle culture, early investing, and wealth creation. They often lack clear guidance on sequencing. "So when they spend on a coffee, skincare, or a short trip, it clashes with an internal voice that says they should be doing more," Das explains. "The guilt is essentially a signal of missing structure, not moral failure."
Sneha Vashisht, senior psychotherapist and founder of Happidition, sees it differently. "Spending on small comforts offers immediate emotional relief." Ordering food after a long workday briefly creates a sense of ease and control. Life feels lighter and more manageable.
But that relief fades because larger pressures do not change. Work demands remain high, rest remains limited, and the future feels uncertain. "When the comfort passes, guilt tends to surface, often later while checking one's bank balance," Vashisht explains.
"The guilt is not only about money. It comes from the tension between wanting ease in the present and carrying concerns about responsibility, adequacy, and whether one is doing enough with life."
The Post-Pandemic Reframe and Social Media Influence
The last few years shaped spending patterns profoundly. Psychotherapist Neha Barik notes that many young adults lived through repeated disruption. Their routines broke, plans changed suddenly, and stability felt temporary.
"In such conditions, long-term planning can feel harder to rely on, while everyday demands naturally take up more mental and emotional space," she says.
Burnout compounds this. "Ongoing mental fatigue reduces the energy needed to pause, think through choices, or hold back," Barik explains. "This is when spending quietly expands to include extra or unnecessary items, not out of carelessness, but because decision-making itself feels tiring."
Social media quietly reshapes what feels normal. Vashisht describes how daily skincare routines involving multiple products are framed as "basic upkeep" without context. "When such routines are repeatedly presented as 'standard,' spending can begin to feel expected rather than a personal choice shaped by one's comfort, budget, or even what their own body actually needs."
People see polished moments without seeing trade-offs behind them. "This makes it easy to question one's own choices, even when spending habits are reasonable," Vashisht says. Over time, spending feels socially acceptable but emotionally stressful.
The Parental Shadow and Family Values
Correa's father constantly repeats, "A rupee saved is a rupee earned." His mother, who worked at a bank, holds strong investment ideals. Both came from poor backgrounds and gave Correa a life they never had.
"This sometimes makes me feel guilty, especially when I was younger and would ask them for money," he shares. When they ask about studying abroad, he shudders, not just at the financial burden, but the guilt of using their money.
Jain jokes that as the elder daughter, she has "a lifetime subscription to guilt and second-guessing." Even when she can afford something, she questions: "Did I really need this? Did I buy it just to make myself feel better?"
Bhardwaj describes her parents' attitudes as "strong influences, though I am trying to develop my own relationship with money in my independent right."
Vashisht confirms these patterns are psychologically rooted. "Our relationship with money is shaped early, and it often carries a mix of guilt, fear, and responsibility." In families where money was tight, children grow up anxious or overly responsible. In comfortable families, money still comes with pressure or unspoken expectations.
A Roadmap to Financial Peace
Das is clear about young earners' biggest blind spot. "Not lifestyle spending, but the absence of buffers. Many young earners underestimate how quickly one disruption, such as a job change, health issue, or family responsibility, can derail cash flow."
Another issue is delayed protection. Emergency funds, insurance, and retirement contributions feel abstract while spending decisions are concrete and emotionally rewarding. "Without early systems in place, even a good income can feel unstable, which amplifies guilt and stress."
His solution? Stop treating budgeting as a restriction and start treating it as permission. A workable framework has three layers:
- Define non-negotiables like rent, essentials, insurance, and basic emergency fund.
- Automate savings and investments.
- Consciously allocate a lifestyle budget meant to be spent without guilt.
"When discretionary spending is planned rather than impulsive, it stops feeling irresponsible," Das says. "Anxiety reduces when people know that enjoyment has a designated place in their financial plan, not when they eliminate enjoyment altogether."
Vashisht suggests creating pauses. Listing wants versus needs or leaving items in carts for a day helps. "These pauses are not about denial, but about giving the mind space to choose rather than react."
Young Indians navigate a complex financial landscape. They balance immediate gratification with long-term security. Understanding the roots of their guilt can help them build healthier relationships with money.
