"Buying Bottled Water Is a Luxury, Only Drinking Water at Work... 20 Million Won Debt, Will Repay Soon?"

Saving Methods of MZ Generation in the Era of High Inflation and High Interest Rates
Popularity of Geojibang, Jarinkobi Room, and No-Spending Challenge

"I have a debt of 20 million won. Is it possible to pay it off within 2 years?"

"I'm in my late 20s and have no savings at all. Is that okay?"

These questions were posted in the 'Jaringobi Chatroom' launched by Toss Bank on the 1st of this month. Out of a total of 819 participants in the poll, 735 people (89.74%) responded that it is 'possible' to pay off 20 million won in debt within 2 years. Regarding saving money in the late 20s, encouragement such as 'You can start saving from now on' reached about 791 people (96.6%).

[Photo by Getty Images Bank]

In a situation where it is hard to find anything that hasn't increased in price, such as food, fuel, and electricity, gas, and water bills, frugal techniques, Jaringobi saving methods, and 'Geojibang' (literally 'beggar room') are gaining popularity. The methods vary from sharing the process of challenging savings on social networking services (SNS) and encouraging each other to setting goals and exchanging opinions through open chat rooms.

Toss Bank announced on the 21st that the 'Jaringobi Chatroom' exceeded 2.4 million votes in about two weeks since its opening. The Jaringobi Chatroom is a communication space available to subscribers of the Gulbi Savings Account. Users post their financial life concerns here, freely exchange opinions through voting, and share saving methods. During this period, 90,000 people used the chatroom, and the shared concerns reached 7,400.

Among the concerns with active user participation, many were related to 'saving' and 'frugal techniques' closely connected to the real lives of the MZ generation.

In a poll with 819 participants, the question "Is buying 1+1 coffee every day at a convenience store overspending?" received support from about two-thirds (65%, approximately 532 people) who said "It's okay to do it." For the question "Is 25,000 won a reasonable price for a woman's haircut?" 67% (about 549 people) responded "It's expensive," more than twice the number who said "It's average," encouraging spending less.

MZ Generation Encourages Saving and Shares Tips... 'Geojibang' and 'No-Spending Challenge' Popular

[Photo by Toss Bank]

With economic slowdown, interest rate hikes, and high inflation continuing, the MZ generation is tightening their belts. Until a few years ago, conspicuous consumption like YOLO or FLEX was popular, but now a craze for 'frugal techniques' to save every penny is spreading.

The 'Geojibang,' where people share their consumption habits and encourage saving, is also popular. It mainly takes place in KakaoTalk open chat rooms, where participants record their spending excluding fixed costs like communication fees and utilities, and share saving tips. They also exchange their own 'Jjantech' (frugal + investment) know-how.

Posts like "I bought a 1,100 won bottled water" receive replies such as "Drink water at work," or "It's going to rain this afternoon, wait a bit longer." Posts about "I paid for a music streaming subscription" get responses like "The worst poison in the world is a subscription. Cancel it immediately."

The 'No-Spending Challenge,' which has become a trend among the MZ generation, is an extreme saving challenge to reduce spending to zero for a certain period. The habit of saving is recognized as a value in itself.

These chat rooms are mainly popular among the 20s and 30s, known as the MZ generation, and can be seen as their struggle to survive in a high-interest, high-inflation environment. At the same time, some view it as a reflection of the anxiety felt by the MZ generation due to the downturn in the stock and cryptocurrency markets, gathering with the mindset that they need to reduce consumption.

According to the 'Increase in Debt Repayment Burden for Young People Due to Interest Rate Hikes and Its Implications' report released by the Korea Development Institute (KDI) in April, it is estimated that annual consumption by people in their 20s decreased by 896,000 won (3.96%) during the period when the base interest rate rose by 3 percentage points since 2021. During the same period, people in their 30s reduced their annual consumption by 613,000 won (2.4%).

Perhaps due to the impact of saving, recent indicators show a decrease in card usage among people in their 20s. According to the Statistics Korea Nowcast, as of the 5th of last month, credit card usage by those under 20 decreased by 0.8% compared to January 2020. This is the lowest figure among all age groups, and the only age groups recording a negative figure were those in their 20s and 60s (-0.4%). In contrast, those in their 30s and 50s increased significantly by 7.5% and 13%, respectively, and those in their 40s also saw a slight increase of 1.7%.

This content was produced with the assistance of AI translation services.