Study Reveals True Cost of Keeping Up Appearances

NEW research commissioned by mobile banking service, MONILINK, reveals that Britons aged 16 - 34 are caught in a cycle of competitive luxury spending to keep up appearances.

The study of 1,619 Britons released today found that 71% of 16 - 34 year olds admit to secretly competing with their friends in the purchase of "luxury" products such as cosmetics, gadgets and clothes.  When compared to the recently identified trend of ‘finance phobia' by younger people, it's clear that many are continuing to spend, spend, spend, with no idea of how much money they really have.  

Driving "Bling-itis" are image concerns. Over half (56%) of Britons believe people are judged on appearances and possessions in modern British society, rather than personality.

The spending trend also appears to be leading Britons to problematic levels of spending:

• 22% have so much debt from non-essential spending that repayments are a "significant" strain
• 62% are still paying off credit card debts from "Bling-itis" driven luxury purchases from 2006/7
• 43% have no savings at all
• 56% spend any spare money they get on luxury goods
• 23% of 16 - 34 year olds admit they find it hard to keep track of spending and make ends meet
• 19% go overdrawn before payday every month

However, with many of the UK's leading banks* now offering mobile banking services free of charge through MONILINK, consumers have more access to their finances than ever before and experts are calling for consumers to take corrective action before it's too late.  

Personal Finance Writer and Broadcaster, Cliff D'Arcy, said: "Britons aged 16 - 34 are obsessed with image. We realise that this won't change but, with all the tools available today, consumers are running out of excuses for not keeping control of their money.   

"Almost everyone has a mobile these days and I urge everyone out there to check to see if their bank offers mobile banking and to then use it as their day to day ‘reality check'."

People suffering from "Bling-itis" were found to have 3 common characteristics:

1. Concern about One's public image

• Almost one in four (23%) 16 - 34 year olds feel a "strong social pressure" to stay in fashion through the purchase of products

• Women (25%) feel this pressure much more than men (16%) and Londoners (44%) were most affected by this "image" pressure in the whole of the UK by a significant (20%) margin.

• One in five (21%) of those aged 16 - 24 feel embarrassed to associate with untrendy friends

• 13% of 16 - 34 year olds buy the same products they see their friends with, simply to fit in 

2. Valuing short term luxury over longer term financial security

• 72% of those aged 16 - 34 polled stated that a good lifestyle in the short term was "considerably" more important than making savings in case of emergency (c. 27%). Even though one in five (20%) admit to being worried about their job security

• Top areas of spending by 16 - 34 year olds to achieve this "good lifestyle" - holidays (27%), drinking and going out (21%), clothes (19%), gadgets (12%), home improvement (10%), car (8%), jewellery (3%)
  
  

3. Association of spending with personal happiness

• 55% of 16 - 34 year olds purchase goods simply to make themselves happy, and "feel down" if they don't get the opportunity to buy goods regularly

John Milliken, Managing Director of MONILINK said: "Bling-itis is dangerous enough, but with the rising levels of personal debt and number of bankruptcies amongst the 16 - 34 age group, keeping control of One's finances has never been so critical".  He continued: "This study highlights the price younger Britons are willing to pay for peer acceptance. But for many, the price is too high - leading to financial problems".

And the study revealed the danger of "Bling-itis" to Britons' finances is increased by the general disorganisation of the 16 - 34 age group around their money:

• Almost a quarter (21%) only check their bank balance once a month.
• 38% regularly go accidentally overdrawn and accrue bank charges because of this
• 32% have "very limited" knowledge of their bank balance
• 48% want to feel more in control of their finances
• 30% of 16-24 year olds have had sleepless nights about their finances
• 35% of 25 - 34 year olds have had sleepless nights about their finances

Britons can now check their balances on their mobile phones by downloading the MONILINK mobile banking service at http://www.monilink.co.uk/