Doom spending is a designer security blanket for young Americans

What does one do when nothing matters anymore? Shop, apparently.

When you have a bad day, it’s important to get yourself a little treat: a fancy latte, a chocolate bar, or, in Gen Z’s case, a $2.5k designer handbag.

Sunglasses, high heels, a purse, and loafers.

If you’re thinking one of those things is not like the others, good eye. Young Americans are reportedly spending generously on luxury items despite tumultuous economic conditions, per Bloomberg.

It’s not that they’re naive: According to a November Credit Karma survey, Americans are worried about inflation, cost of living increases, finding affordable housing, and — especially for younger generations — finding high-paying, secure jobs.

They’ve just found a unique, albeit pricey, way to cope: doom spending.

  • Twenty-seven percent of Americans say they “doom spend” to deal with stress. The rates are higher for millennials (43%) and Gen Zers (35%).
  • Thirty-two percent of Americans have taken on debt in the last six months, with 27% attributing it to increased spending.
  • Forty-seven percent say the amount of money they’re saving has decreased, and 52% say they have less than $2k in savings.

As for all that spending, the proof is in the luxury pudding: The National Retail Federation’s 2023 census data shows that holiday sales rose 3.8% YoY to $964.4B.

Fatalistic shopping habits…

… are not new. Research from 2005 found that people who perceive luck to play an important role in their finances are more likely to realize they need to save money, but less likely to do so.

What is new is the fact that young people have the disposable income to afford this doom spending.

  • Fifty-seven percent of American adults under the age of 25 live with a parent.
  • Just 16% of adults ages 18-24 are entirely financially independent.

Plus, social media certainly perpetuates spending, with influencers flaunting designer hauls and big-ticket splurges.

But don’t worry — in the time it took you to read this, there’s already a new buzzword: loud budgeting.

Topics: Shopping

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