Luxury broke: why Gen Z is faking wealth and paying for it later

Buy now, cry later

It’s a Friday night in Soho. She’s wearing Tabi boots she’s paying for on Klarna, a fake Van Cleef necklace and bracelet, and she’s sipping a £14 cocktail she can’t really afford. Her bank balance is in the red, but her Instagram? Portrays a life of luxury.

In an era of soaring rent and food prices and economic uncertainty, Gen Z’s relationship with money is anything but straightforward. When you scroll through TikTok, Pinterest or Instagram, you will be met with a generation that appears anything but broke. ‘Quiet luxury’ aesthetics,  designer dupes, and buy now, pay later (BNPL) services like Klarna help aid this appearance. Young people are increasingly performing having wealth, even when their bank balances say otherwise.

The urge to look rich in a financially unstable climate is more than just a superficial desire, it’s psychological. Psychology analyst Anabel O’Dea explains: “People need small hits of dopamine throughout the day to keep them going and to keep them happy.”

These purchases, often facilitated by Klarna or similar BNPL services, provide a sense of short-term satisfaction. “It feels as though they’re not spending as much money because they get the item upfront, but the cost doesn’t feel real until later,” O’Dea says. “It tricks your brain into thinking the purchase is  affordable when it’s not.”

Klarna, which has 18 million UK users and a 2024 revenue of £2.1 billion, is thriving by offering instant access to products with delayed payments. In fact, 71% of UK retailers offer BNPL services such as Klarna, according to Statista. But these services tap into something deeper: our brain’s reward system. “You get the reward, the dopamine hit, without the immediate financial anxiety,” O’Dea explains. “It’s only later that reality and the payments hit.”

Sienna Cassells, a regular Klarna user, is part of this growing consumer base. She uses Klarna up to “four or five times a month”, she says. “I buy a bit of everything to be honest, mostly clothes or makeup or accessories, things like that.” She acknowledges the appeal: “It makes luxury feel more accessible. I don’t have to wait paycheck to paycheck.” But she’s also honest about the downsides. “I bought a jumper off Depop that I don’t like, and obviously I can’t return it and get my money back, so now I’m just paying for this jumper I don’t like, and I’m gonna have to wait to sell it to now recoup that money, so things like that, I probably wouldn’t use Klarna for again.”

This reveals the emotional paradox at the heart of Buy Now, Pay Later culture: instant gratification versus long-term financial strain. The desire to feel good in the moment often outweighs the looming stress of repayment, especially for a generation constantly confronted by curated images of wealth online. The pressure to keep up, both socially and aesthetically, makes it easy to justify spending beyond one’s means, even when the emotional payoff is fleeting.

Still, many in Gen Z feel it’s worth it. Cassells says, “I feel happier making a payment without Klarna, as I know that I’m not having to continuously pay it off, but at the end of the day, I’m choosing to do it because I’d rather have the item anyway.”

When looking into what influences people’s need to continuously buy, social media has a big role to play. Data from Statista shows 45% of BNPL users in the UK remember seeing related ads. Two aesthetics plaguing many social media feeds are ‘quiet luxury’ and the ‘old money’ look, both of which encourage users to tap into a curated, aspirational image that signals subtle, understated wealth.

Personal stylist Gemma Hicks says, “Popular brands like Mango and H&M are releasing collections that incorporate the use of linens, embossed gold hardware and handbags mimicking  the Birkin silhouette.” These collections allow Gen Z to buy into this image, even if they can’t afford the real thing.

This performative wealth has its cost not just financially, but emotionally, too. As Cassells says,” it can become a slippery slope if you’re making these purchases, especially with the buy now, pay later option. It almost seems free at the time, and then you have to remember, you are going to have to pay it off in 30 days. Or even dividing these payments into three.”

As Gen Z continues to navigate a world of financial instability, rising living costs, and relentless online influence, their spending habits reveal more than material desires; they reflect a generation trying to find control and  comfort through consumption. Whether that is through Klarna-funded shopping sprees or luxury aesthetics on a budget, the illusion of wealth can feel like a necessity in a world that rewards appearance over reality.

• Klarna was contacted for comment on this story.