Gen Z seem richer than they really are, claims Bengaluru man: ‘They splurge Rs 500 on avocado toast but can’t buy…’; studies say it’s not mindless spending

Gen Z apparently are living life king style, yet are struggling to buy a car or a house. Taking to Instagram, Bengaluru-based content creator Ishan Sharma explained why. The YouTuber and marketing professional explained the bizarre reason why many Gen Z people seem to be able to splurge Rs 500 on avocado toast yet are not being able to buy a house or car. The reason, he argued, is due to a phenomenon known as the “lipstick effect". He stated that the average cost of a home in tier 1 India costs 30 times more than your annual average salary. During the time of the previous generation, the cost of these homes was 10 to 12 times more than the average annual salary.

As traditional metrics of having “arrived” are out of reach for most Gen Z, they are content to spend their money to live a better life that appears successful on social media. They don’t see any need to save money to buy a home or a car, only to enjoy the present.

According to a report by PwC that analysed nearly a million customer transactions, Gen Z are more likely to treat themselves to luxuries such as matcha and designer sneakers. According to a 2025 NCSolutions survey, Gen Z professionals also relish treats such as lip balm, scented candles, etc.


As per his LinkedIn profile, Sharma dropped out of the Bits Pilani - Goa campus to focus on his YouTube channel.

It’s Not Just Mindless Spending

As per a Forbes article, these indulgences are more about surviving in a difficult economic climate than they are about pleasure. Furthermore, 53% of Gen Z claim that they purchase modest indulgences since larger milestones, like homes or vacations, seem too expensive. These purchases are seen as motivators or stress relievers.

In a stressful and uncertain environment, taking care of yourself can help you regain control. This is exemplified by the well-documented phenomenon known as "The Lipstick Effect". It characterises a trend in which consumers spend less on expensive things (such as trips, vehicles, or high-end technology) but more on modest but reasonably priced indulgences during uncertain economic times like recessions or periods of financial hardship. For example, according to a study published in a 2020 study published in the Journal of Behavioral and Experimental Economics, it was claimed that during the Great Recession (2007-2009), women aged 18 to 40 spent more on cosmetics.