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Doom spenders run the risk of quickly running up debt. And the earlier you develop a habit of overspending, the more likely it is you'll have insufficient savings or retirement funds.
A fragile economy, global warming, student loan debt, and near-constant political and social unrest are some of the reasons people turn to doom spending.
Doom spenders are those who are overwhelmed by the multiple world crises currently affecting humanity. To counter the stress and anxiety this generates, they embark on frivolous spending sprees.
And therein lies the problem. According to a recent study by Credit Karma, 43% of millennials and 35% of Gen Zs doom spend to make themselves feel better.
The doom spenders' defense is that they can't afford anything else. Homeownership is a distant dream and, with it, starting a family.
Consumer economies thrive by stoking our angst and playing upon our insecurities. We are told that we'll be left behind if we don't buy the new, latest thing. In other words, we are warned of FOMO, the fear of missing out.
Fueling this message is social media, on platforms like TikTok and Facebook. Exemplifying the doom spending phenomenon is the #TikTokMadeMeBuyIt trend, where users show off recent items they have bought online.
Compounding the issue is the fact that younger individuals often lack the financial acumen and long-term perspective needed to resist impulsive spending.
Doom spending is a worrying phenomenon that's afflicting millennials and Gen Z.
The Credit Karma study identified inflation as the biggest driver of doom spending.
In some ways, doom spending affords an individual a way of taking back a sense of control over their own life and finances.
Doom spending is also seen as a coping mechanism to deal with anxieties about personal finances. For example, you might fret because you don't have enough money to pay your bills, save, and have fun.
Adding to the woe is the struggle with peer pressure and, increasingly, identity formation.
Doom spending has been described as Gen Z's version of retail therapy. And there are similarities. Retail therapy has long been used for its instant gratification. Doom spending, however, takes this concept to a whole new level.
People with this mindset may feel like there's no point in saving, since they believe they won't be able to achieve their financial goals. In cases like these, they prefer to live for the moment.
The Eurozone inflation rate for July 2024 stood at 2.6%, above expectations. In the United States this figure was closer to 3%, according to Trading Economics.
But while it may serve as a quick fix, the reality behind doom spending is that it prompts a person into chasing trends while encouraging another round of regret purchasing.
Interestingly, self-reported rates of doom spending are higher among men, according to Credit Karma's survey. The study revealed that 33% of men admit to it, compared with only 21% of women.
This difference may be because men traditionally have enjoyed more spending power than women, who generally earn less and therefore save and invest less. But it's younger women who remain the most susceptible to the doom spending phenomenon.
Some consumer experts suggest keeping a spending diary. It's important to identify why you've chosen to follow this trend. So every time you spend money note down the events leading up to the purchase, how you felt at the time, and your response afterwards.
Delete any shopping apps you may have on your phone. The popularity of e-commerce makes it very easy to shop on the go at a swipe and a click.
Similarly, make a point of identifying any influencers and activities that are pushing you towards spending and draining your bank account. Make a judgment call on whether it's best to stop following them.
Empty your mind of all thoughts spending by taking stock of activities other than shopping that you enjoy and find relaxing to deal with. For example, go for a walk or run with friends.
Alternatively, embrace an activity such as yoga, a discipline that nourishes both mind and body and takes you well out of the spending zone.
Start getting into the habit of saving a little money, day by day, week by week. And if you do use a credit card, make small purchases and pay the balance off in full the following month.
Steer yourself away from self-serving consumerism by investing in your community instead. Helping others brings with it huge benefits for everyone, not least the genuine sense of achievement gained by volunteering your services for a good cause.
And be aware that doom spending is not self-care. It can be a very harmful habit to fall into. Furthermore, it may be the result of a more underlying mental health issue. As a last resort, seek professional counseling if you feel you really can't curb this very 21st-century social phenomenon.
Sources: (Credit Karma) (U.S. News & World Report) (Euronews) (British Vogue) (Sky News) (Trading Economics)
See also: The important link between mental health and the body
What is certain is that the habit of doom spending shows no sign of slowing down, and with it the danger for many of spiraling further into debt. So, what can you do to curb doom spending?
Doom spending is spending excessive amounts of money on luxury items, things like clothes, travel, and tech gadgets. It's essentially about purchasing instant, short-term enjoyment.
The ubiquity of the mobile device has also led to the rise in buy now, pay later schemes.
In the first instance, try and set financial boundaries. Do this by designing a budgeting framework. The 50/30/20 rule is a useful benchmark: allocate 50% of your income to your essential expenses, 30% to discretionary expenses, and 20% to other goals.
The current world situation is proving difficult to live with. Fragile economies, global warming, financial crises, and near-constant political and social unrest is challenging the minds of many. Most of us have found ways to deal with the stress and anxiety this bombardment of bad news brings. Others, however, and especially millennials and Gen Z, are having difficulty coming to terms with what they see as a hopeless situation. And that's when they turn to coping mechanisms such as doom spending.
This relatively new phenomenon mimics retail therapy but with potentially far more worrying consequences. And it's a trend that's found a broad platform on social media. But how concerned should we be about doom spending, and can it be curbed?
Click through and spend time learning more about this alarming consumer trend.
What is doom spending, and can it be curbed?
This worrying new consumer trend is on the rise
LIFESTYLE Consumer trends
The current world situation is proving difficult to live with. Fragile economies, global warming, financial crises, and near-constant political and social unrest is challenging the minds of many. Most of us have found ways to deal with the stress and anxiety this bombardment of bad news brings. Others, however, and especially millennials and Gen Z, are having difficulty coming to terms with what they see as a hopeless situation. And that's when they turn to coping mechanisms such as doom spending.
This relatively new phenomenon mimics retail therapy but with potentially far more worrying consequences. And it's a trend that's found a broad platform on social media. But how concerned should we be about doom spending, and can it be curbed?
Click through and spend time learning more about this alarming consumer trend.