Who are HIFI people and what can their obsession lead to?

People HIFI loves buying parts/freepik

Many Americans want to look wealthy. And for this, some draw inspiration from their favorite celebrities or hope to keep up with fast-changing trends. Either way, they spend a lot of money.

People who fall into this category are HIFI, high income people, financially insecure. They mostly consist of millennials and members of Generation Z, according to Sherwood News, who want to radiate “old money” or “quiet luxury” but struggle to keep up with changing lifestyles, writes Business Insider. p>

HIFI is the latest acronym to describe one facet of the American economic experience, joining the ranks of DINK, HENRY and ALICE.

Although people under 40 are accumulating more wealth at an earlier age than previous generations, 48% of Gen Zers and 59% of millennials say they feel financially behind, according to a Credit Karma survey that took participation of 1,006 American adults published in December.

This may be due to inflation keeping prices high, the rising cost of living in US cities, and the end of pandemic-era government cash infusions combined with student loan and credit card debt.

The Sherwood News reported that many HIFI consumers began to spend rapidly during the pandemic. Stimulus vouchers provided young people with extra income and, as people stayed at home, they spent more money on online purchases rather than for restaurants, recreation or vacation.

The “buy now, pay later” feature of credit cards, Amazon and other online platforms is fueling this shopping, according to Adobe's 2024 report. According to the report, shoppers feel that goods are more affordable when they can pay in installments.

HIFI people spend more than they earn/Photo by rawpixel

Nor have many Americans curtailed their shopping habits during the pandemic – even as they have resumed their social spending by reopening restaurants and places to relax.

In addition, there are social reasons for HIFI behavior: people want to feel rich.

According to a 2023 Schwab survey of 1,000 Americans, younger generations tend to judge their wealth in comparison to their peers. If a friend or social media user owns something, Gen Z and Millennials don't want to lose it.

Some buy the same expensive item of clothing or accessory that they see on celebrities or on social networks, while others look for fakes.

According to a report by Bain & Co. published in January 2023, millennials and Gen Z were responsible for 22% of the growth in luxury spending in 2022. But for many, this spending culture is unsustainable.

HIFIs are increasingly facing the economic gap. Although they are affluent, their income is often not enough to cover luxury and high-end spending for everyday life.