For younger generations like Gen Z, financial goals like homeownership and retirement savings can feel totally out of reach in today’s economy.
With traditional milestones so far away, indulging in small luxuries can provide immediate fulfillment.
This fatalistic attitude is driving a counterintuitive trend called “doom spending.”
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- Doom spending on luxuries is rising among Gen Z as traditional financial goals feel impossible.
- 27% of Americans admit to splurging to cope with economic dread, even higher for Gen Z (35%) and Millennials (43%)
- While risky, doom spending represents changing dreams and fatalism amid despair over housing costs and other money woes.
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The Economic Despair Driving Gen Z to Splurge on Luxury Goods
While typically people pull back on spending when times are tough, 27% of Americans admit to blowing money on non-essentials to cope with economic and political dread.
Rates are even higher among Gen Z (35%) and Millennials (43%).
“It’s a way to cope — albeit not the healthiest one,” said Courtney Alev of Credit Karma.
Spending as Self-Fulfilling Prophecy
While doom spending may reflect the current situation, the habit is hardly new.
Research from 2004 found fatalistic attitudes make people less likely to save.
Professor Stephen Wu argues this feeling has become more common after the Great Recession and the pandemic made success seem dictated by chance.
For Gen Z, parental support enables big luxury purchases. With nearly half living at home, extra disposable income often goes toward designer goods.
Social media showcasing lavish lifestyles also fuels the temptation to keep up.
Without caution, doom spending becomes self-fulfilling.
Is This Really Irresponsible?
Splurging may seem misguided.
But it’s not so clear-cut for those who’ve abandoned suburban dreams.
Maria Melchor, a Gen Z financial influencer, argues it offers a glimpse of life with money not all spent on real estate and kids.
With declining marriage and birth rates, plus remote work untethering young people, the stereotypical “dream” is transforming.
For Melchor, Gen Z’s indulgence in luxuries shows what’s possible if money doesn’t go solely toward housing and children.
While doom spending won’t solve economic woes, it represents Gen Z’s desire for fulfillment amid despair.
With traditional milestones out of reach, small luxuries offer coping, joy, and meaning.
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