Research shows how different generations cope with bad economy


Fashion-conscious young people in their 20s spent less on clothing to survive the prolonged economic slump, suggested recent research.

Hana―SK Card said on Thursday that the credit card use of consumers in their 20s steadily decreased since the fourth quarter last year. The card company analyzed the consuming trend of its customers during the past year.

This year marks the first time that clothing purchases have dropped from the top 10 expenditures since the financial crisis that hit Korea in the late 1990s. The 20s spent 11 billion won ($9.7 million) on clothes in the second quarter of this year, which ranked 12th in the list of expenditure categories including food, living and oil. The figure was 10.1 billion won in the first quarter and was also excluded from the top 10 categories.

Consumers in their 30s and 50s broke off insurance policies, mostly to support their kids’ education.

Insurance fees, which used to be among the top 10 categories for the 30s’ expenditures, dropped from the list in the second quarter this year, marking 31.2 billion won. The same situation occurred in the list of expenditures for the 50s, many with children attending university, as insurance fees marked 16 billion won.

Notably, those in their 30s spent more on kids’ education than ever: 80.6 billion won. The category ranked 5th place in their list of expenditures for the first time.

The 40s, who used to spend heavily on entertainment, are cutting back on amusement expenses, including beer. The category scaled down one notch in the list of expenditures from 8th place last year to 9th, marking 42.9 billion won.

“Consumers’ credit card spending reflects the aftermath of the economic slump. The way they cut out on clothes and amusement and cancel insurance policies shows the difficult household states,” said Hana-SK Card officials through statement.

An interesting point in the research is that “living and housing” expenditures of those in the 20s and 30s increased. The category ranges from expenditures on heating, gas and home appliances to home improvement.

The 20s spent 13.9 billion won on the expenses, which came in 8th in their expenditure list in the second quarter, although the category had never made it among the top 10 before. The 30s spent 43.4 billion won for the same expenses, which also marked among the top 10 of their expenditure list.

The report assumed that such expenses increased as more people rent apartments rather than buy one, as the real estate market is sluggish.

By Park Min-young  (claire@heraldcorp.com)