KRD revealed surprising data after analysing Poles' household budgets. It turns out that most of us cannot manage our money sensibly and tend to get into debt. Data from the Central Statistical Office shows that, although wage growth is clearly visible, consumer responsibility is not keeping pace.

KRD data reveals that Generation X, born between 1965 and 1979, is the most indebted generation. This is likely due to their current life stage and circumstances rather than lifestyle choices. With young people leaving home later and starting out on their own, Generation X is primarily burdened with mortgage repayments.

Rzeczpospolita, the first to analyse the KRD report, highlights the varied reasons for debt among different age groups in Poland. Generation Z tends toward luxury and exclusive gadgets, while Millennials embrace a consumer lifestyle and enjoy spending money. Seniors, despite their desire to repay financial obligations, often lack the means to do so.

Rzeczpospolita, citing the debt collection company Kaczmarski Inkasso, reports that young people are most likely to take out instalments for luxury goods and then fail to repay them. The latest models of iPhones, game consoles, or electric scooters—items that emphasise their status—are particularly popular. Unlike previous generations, Gen Z doesn't flaunt cars; instead, they showcase phones or limited edition shoes.

I'm a 27-year-old Zoomer currently paying off instalments for a management course and headphones. I chose to pay for the headphones in monthly instalments of 100 zloty even though I could have bought them with cash, as I wanted to build up my credit history. I've previously used a hire purchase to buy a sofa (paid off in three months), a phone, and a computer. For the phone and computer, I paid half of the amount upfront because I didn't want to commit to a financial plan for more than a year, given the lifespan of the devices. I only consider zero interest instalment plans and avoid buy now, pay later schemes. Although I used platforms like PayPo or Klarna twice for quick purchases (shoes and a game), I later discovered that this could negatively impact my credit history. Since then, I've been cautious about using such platforms.

It's important to note that getting things on hire purchase isn't always straightforward. For instance, banks may not approve individuals who work on a commission contract basis. This often includes young people, even if they're not in their first job.

"I have been working as a photographer for several years. Unfortunately, my old laptop recently broke down, and I badly needed a new one. I was tempted by a certain offer at a popular electronics shop, but despite having a steady job and a stable income, I had trouble taking the equipment on hire purchase. It was probably all due to my contract valid for only three more months," says 19-year-old Olivia.

The KRD report reveals that not only Gen Z feels the need to impress their peers. Millennials also experience significant peer pressure. However, Generation Y aims to make a "bigger" impression than Zoomers. The pursuit of prestige extends beyond shoes and phones, encompassing cars and exotic family holidays. Kaczmarski Inkasso reports that Millennials lag significantly behind in their credit card repayments.

"I'm not currently paying off any instalments, but I have used hire purchase to buy electronics. I've purchased high-quality speakers and my last two iPhones this way. In my opinion, zero-interest instalment plans are beneficial when we want to buy a specific product for which we would otherwise use cash. Instead of spending a large sum of money at once, we pay back the same amount in instalments. These plans also make sense for people who are better at making regular repayments than saving," says Marta, a representative of Generation Y, somewhat breaking out of the typical Millennial image presented in the KRD report.

According to KRD data, Generation X has the highest tendency to get trapped in a cycle of debt and resort to taking out new loans to pay off existing ones. Despite this, Generation X is eager to move past the debt stage and is open to assistance in managing their finances. Baby Boomers, born between 1946 and 1964, view repaying financial debts as a matter of honour. The challenge for Boomers in making timely payments is primarily linked to their economic circumstances and the need to cover the costs of expensive medications or doctor's visits.

Source: Rzeczpospolita